New Zealand's economy surged in the December quarter to the best level since mid-2007, according to the latest Quarterly Survey of Business Opinion, which shows firms are more optimistic and output is increasing across the board.
The survey, conducted by the New Zealand Institute of Economic Research (NZIER), shows a rebound in activity, particularly in Canterbury but also a "very good lift" in Auckland.
The survey's measure of business confidence rose to plus 19 per cent in the December quarter from minus 1 per cent in the previous quarter.
A positive reading indicates more optimists that pessimists.
The trading activity indicator surged to best level since mid-2007, rising to plus 8 per cent from minus 4 per cent in the previous quarter.
"Capacity pressures are intense in Canterbury, but there is little pressure in the rest of the country," said NZIER principal economist Shamubeel Eaqub.
"Firms do not intend to raise prices much. Consumer price inflation will remain low," he said, predicting that the Reserve Bank of New Zealand will keep interest rates on hold for some time.
The NZIER survey results are consistent with annual growth of above 2 per cent for 2012.
There's no doubt that the Canterbury rebuild will play a large role in New Zealand coming out of the economic doldrums. We were down in Christchurch again at the weekend, and every time we go there, new buildings have started, new cafes and restaurants are opening and infrastructure projects are underway all over the city and its environs. It will be no flash in the pan either; there is so much work to be done that it will last for years.
But even talking with business colleagues from other parts of the country, we are sensing an improvement in mood. And just two weeks into 2013, we have already started two new employees, and will soon enough hit to 50 staff mark.
Low interest rates are good news too. Mortgage and other lending rates were supposed to start climbing again early in 2012, but that never happened. We're doing our best to blitz our mortgage whilst rates are at record lows, and get our business debt levels down as well.
The naysayers will doubtless trot out the normal doom and gloom. We've just done the GST returns for October/November, and made our contributions to Bill English's coffers. The sums paid were greater than for the same period in 2011; in the case of one of our businesses substantially so. Here's hoping that the economy is indeed on the upswing for the new year.