Business confidence remained steady across a broad range of indicators, according to the influential NZIER quarterly survey of business opinion released yesterday.
New Zealand Institute of Economic Research senior economist Christina Leung said the survey showed the New Zealand economy was heading into 2015 in good shape.
''While the softening in activity indicators suggests a moderating in growth in the March 2015 quarter, annual growth is still expected to be respectable at just over 3%.''
Business confidence remained steady at 20% net optimists, after adjusting for the usual seasonal variations, she said.
Confidence was well below the lofty levels seen a year ago but firms were still ''fairly optimistic''.
The services sector fared particularly well, buoyed by increased house sales in an environment of low interest rates and strong mortgage lending competition among banks. The manufacturing sector had also been surprisingly resilient in the face of a higher dollar, Ms Leung said.
The survey noted profitability expectations lifted.
Domestic trading activity, which closely mirrored GDP growth, eased from 22% in December to 19% - consistent with annual GDP growth moderating to just above 3% for the year ending March 2015.
''Profitability expectations have picked up with more businesses now th inking about investing in buildings and plant and machinery.''
Despite the solid level of activity, inflation pressures remained subdued and few firms reported cost pressures, or planned to raise prices, she said.
The low inflation rate had driven a fall in interest rate expectations.
A net 4% of financial services firms now expected interest rates to fall over the coming year, in contrast to a net 17% expecting an increase in interest rates in the December quarter.
ASB senior economist Jane Turner said there were no implications for the Reserve Bank from yesterday's survey.
''We do not expect official cash rate increases in the foreseeable future and given the ongoing weakness in underlying inflation pressures, we still see the near-term risks as skewed towards a rate cut.''
