Business confidence has rebounded strongly from last month's post-earthquake plunge as firms look beyond the Christchurch shock, according to the National Bank's monthly survey.
"It's pretty encouraging," the bank's chief economist, Cameron Bagrie, said.
"Businesses have stepped back, had a look at what matters and decided to move on. The real fear was that we could have headed back into the cave for winter. It looks like that's not happening."
A net 14 per cent of firms expect better times for the economy over the coming year, whereas 9 per cent in March expected worse times. The rebound was especially marked in Canterbury, which recovered two-thirds of March's 92-point plunge.
Firms' expectations for their own activity, the real litmus test of the economic outlook, bounced back too, with 30 per cent expecting improvement, up from 15 per cent in March.
Excluding Canterbury, own activity expectations recovered three-quarters of the previous month's fall.
In Canterbury it recovered two-thirds of a much steeper decline and at 28 per cent is not much lower than in the rest of the country.
While some credit for the rebound could go to the Reserve Bank's cut of 50 basis points in the official cash rate, Bagrie said people had underestimated how much momentum the economy had in the first seven weeks of 2011, before the earthquake.
"We took a hit with the quake but once things settled down people started to realise the underlying story was still moving in the right direction," he said.
"The feel-good factor tends to be driven by the property market. Things have started to pick up there - off pretty low levels, but it is still pointing in the right direction."
Hiring intentions have moved back into the black. A net 6 per cent of firms expect to be increasing staff numbers, up 9 points on March and taking employment intentions close to where it was in February. A net 8 per cent of firms expect higher profits, up from zero last month.
"This is still low and implies a lot of caution out there," Bagrie said.
The bank's composite growth indicator based was pointing to annual growth of 3 per cent by the end of the year, he said.
Export intentions strengthened 5 points to a net 29 per cent positive. Among manufacturing exporters, a net 46 per cent expect higher export volumes, reflecting a more supportive exchange rate with Australia.
At the sectoral level, manufacturing, retailing, construction and services all improved and retailing more so, after being a laggard.
Agriculture bucked the trend with headline confidence, activity, profits, employment and investment intentions all slipping - but from a higher level.
A large part of the hand-wringing in the in the previous survey had been due to uncertainty. The rebound in this month's suggested that fall had been more shock than substance.
"This is not to downplay the significance of the February earthquake. It is an event of epic proportions. Nonetheless it is encouraging to see businesses stand back, assess things and decide to move on."