Confidence remains very buoyant in the ANZ's monthly Business Outlook survey, a net 53 per cent of firms expecting the general business situation to improve in the year ahead.
While marginally lower than the 54 per cent recorded in September, when the mild seasonal element is adjusted for it means confidence is at the highest level since July 1994, says ANZ chief economist Cameron Bagrie.
Firms are also confident about their own prospects, a net 47 per cent expecting a lift in activity, the most since October 1994.
Employment and investment intentions were at a net 19 per cent positive, he said, and export intentions were creeping back up, rising four points to a net 27 per cent expecting an increase.
It was pretty impressive considering the rise in the exchange rate over the month. The New Zealand economy was in a sweet spot, Bagrie said.
"While we remain at the mercy of global forces to a degree, local specifics - housing shortages, booming dairy prices, a city rebuild and a turnaround in job prospects encouraging less emigration - are delivering considerable pep."
For those demand-side drivers to deliver sustainable growth, the supply side had to step up and Bagrie was optimistic about that.
"There's an emerging positive productivity story across New Zealand Inc. Very few firms have got the same cost structure and operating models they had four years ago. They've been forced to become fighting fit. Their balance sheets are pretty strong."
On the inflation front, a net 22 per cent of firms expect to raise prices, after three months around the 30 per cent level. Bagrie defers judgment on that but says it looks like a "Goldilocks" economy with pretty strong growth and not too much inflation at the moment.
ANZ's composite growth indicator, which draws on the business survey and the ANZ Roy Morgan consumer confidence survey, was signalling growth potential of more than 4 per cent by early next year.
The two sectors were in alignment, which hadn't happened from 2009 to 2012.