Canterbury's rebuild has underpinned a rebound in business confidence for the quarter to September, but also highlights the uneven economic recovery across other regions.
Overall, business confidence is now at its highest in more than three years.
The number of optimistic businesses had risen from 30% in the previous quarter to 32%, while domestic trading activity, a reliable indicator of gross domestic product (GDP) growth, rebounded from 5% to 11%, according to the quarterly New Zealand Institute of Economic Research business opinion survey.
NZIER's principal economist Shamubeel Eaqub said the rebound in domestic trading activity from 5% to 11% had reversed a small drop in June, which was consistent with about 3% annual GDP growth.
''Businesses are optimistic, activity is rebounding and this is being gradually realised into more jobs and profits,'' Mr Eaqub said.
However, the recovery is uneven across regions and while Canterbury was ''growing strongly'', momentum was waning across some key indicators, such as investment intentions, he said.
Westpac senior economist Michael Gordon said general business sentiment remained ''strong'' during the September 2013 quarter and a net 32% of firms expected improvement during the next six months.
That matched the previous peak, reached in the March 2010 quarter, which reflected optimism about a post-recession bounce.
''A net 11% of firms reported stronger activity over the last three months, the equal-highest since 2007, while expectations for the next quarter were the strongest in over a decade,'' Mr Gordon said.
ASB economist Daniel Smith noted businesses' expectations of their own activity levels also crept up, suggesting the economy ''should expand at a fair clip'' during the rest of the year.
While overall confidence had not changed much during the past two quarters, the composition had, Mr Smith said''We've seen a steady broadening of confidence across sectors and regions.
''Earlier in the year, the building industry and the Canterbury region were the drivers of the high overall readings,'' he said.
However, confidence had since risen across the other parts of the economy, suggesting a slowly broadening recovery.
He said one of the most encouraging results from the survey was the employment category. Employment during the past quarter dipped from 3 to 1, remaining very subdued, but expected hiring during the next quarter jumped from 9 to 17, the strongest reading since the fourth quarter of 2004.
''That suggests that labour market conditions are likely to improve more rapidly,'' he said.
Despite Canterbury's recovery, Mr Smith said inflation pressures remained ''very muted for now''. Although resource constraints were creating some pressure in the Canterbury economy, the national economy still retained plenty of spare capacity.
As that capacity was progressively absorbed, ''we expect inflation to pick up from its currently very low level during the next few quarters'', he said.
