The official cash rate is widely expected to stay at 2.5% when the Reserve Bank makes its decision tomorrow but markets will be looking for any signs for a future rate rise.
Westpac chief economist Dominick Stephens said he agreed with predictions that the central bank was likely to leave the OCR unchanged for the rest of the year.
"But we acknowledge that this relies on two highly uncertain judgements: the initial degree of spare capacity in the economy and the speed at which it gathers pace. Both of these will affect how quickly the economy reaches or exceeds its speed limit and how quickly the Reserve Bank will need to act."
The handful of post-quake data had provided some comfort that the risk of a post-quake downturn on a national scale had not been realised, he said.
Initial surveys of businesses and households showed the plunge in confidence for which the Reserve Bank had braced itself. But subsequent readings had seen confidence stabilise, or even pick up in some cases, with soaring commodity prices leaving the agricultural sector particularly chirpy.
It seemed that outside of the Canterbury region, economic activity had retained the momentum that was emerging in the early part of the year.
Electronic card transactions had grown steadily in recent months, house sales had picked up - mostly in the squeezed Auckland market - and the performance in manufacturing index surveys indicated the manufacturing and service sectors clung to growth in March, Mr Stephens said.
The Reserve Bank would be aware the growth was coming from an extremely weak starting point. The unemployment rate was still double its pre-recession low and surveys showed that capacity utilisation was below its 10-year average, he said.
There was still a lot of slack in the economy relative to its potential which had and would continue to make it difficult for higher wage and price demands to take hold.
"As a result, we expect the Reserve Bank will stick with its intention to delay rate hikes until the reconstruction of Christchurch is under way. It's worth bearing in mind the bank can act fairly quickly on this.
"It will be - metaphorically - counting the cranes on the skyline rather than waiting for the rebuild to show up in the official data," Mr Stephens said.
