Nelson is streets ahead in its business confidence, a new survey shows.
The national economy is described as "stonking" - running at the best pace in more than a decade, with business confidence still at a 20-year high.
The latest NZIER Quarterly Survey of Business Opinion shows "persistent optimism" and activity were being translated into hiring, investment and better profits.
"The underlying trend in the economy is very, very strong - stonking," NZIER principal economist Shamubeel Eaqub said. "Everything is going up and broadening across regions and industries."
The Nelson, Tasman and Marlborough region is leading the way with a 44 per cent increase in business optimism, ahead of Southland 33 per cent, Auckland 26 per cent and Canterbury and the West Coast 24 per cent.
Eaqub cautioned that the top of the south result was based on 50 survey respondents but said things were looking very good for Nelson, with 61 per cent expecting production or sales to improve.
"Things are looking pretty positive," said Nelson Regional Economic Development Agency chief executive Bill Findlater.
"Nelson has been on the rise for a little while. Timber and forestry have been doing well for a couple of years and horticulture had a really good year last year.
"That means there more money starting to be spent and things are not looking too bad this year, there's a general feeling of confidence. There appears to be more tourists around.
"Generally all our primary sectors are doing well, there's no reason why it should not carry on this year. "
A drive along Queen St in Richmond showed there was plenty of construction activity, and more retail centres were planned, he said.
Tasman Bay Food managing director Brian Hirst said everybody in business was doing reasonably well.
The firm, which manufactures food products and employs 50 staff, decided a year ago to focus on exports to south-east Asia and Australia, and that was now flowing on into some big contracts, he said.
It was aiming to double its revenue over the next five years to $20 million.
"That's where we are heading; I think things are cautiously optimistic."
The survey showed strong domestic trading, pointing to economic growth of 4.5 per cent, though NZIER did not expect growth to hit such a high speed.
Firms were finally bringing in planned price rises as consumer demand picked up, Eaqub said. Fattening margins and growing sales were boosting profitability.
With inflation set to rise, bank economists expect the Reserve Bank to lift official interest rates again in a fortnight, with the cash rate heading for 4.5 per cent by the end of next year. Eaqub expected floating mortgage rates to hit 7.5 per cent next year.
The NZIER survey shows confidence remained at net 52 per cent of firms positive, seasonally adjusted - the highest since June 1994. Fairfax NZ
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