"That's what firms know best and it's therefore the real litmus test, with a strong correlation to GDP growth."
Profit expectations and investment intentions both improved, by two and three points respectively.
While hiring intentions softened by two points to a net 21 per cent expecting to lift staff numbers, the level remained healthy, Bagrie said.
Exporters' expectations (of volume not values) climbed to a net 32 per cent expecting a rise, from a net 24 per cent in the February survey.
"It is the highest reading since April last year and remarkable considering the New Zealand dollar is so far above fair value," Bagrie said.
The agriculture sector recorded the highest level of expectations for own activity, and its profit expectations and hiring and investment intentions all lifted.
"Kinder weather, or should we say less intense drought conditions, and lifts in dairy prices over late February have been the elixirs," Bagrie said.
"But the litmus test will come in April, given dairy prices are under renewed pressure."
In the construction sector, expectations for residential building softened from a net 48 per cent positive in the February survey to a net 38 per cent in the latest one.
"That's nothing more than receding from incredible highs. Commercial construction intentions [a net 43 per cent positive, up from a net 26 per cent] are filling that void anyway."
Bagrie is forecasting economic growth of 3 per cent over the year ahead, based on indicators including business and consumer confidence, the Truckometer and commodity prices.
Though not unanimous in the signals they were providing, the collective picture was of continued strong momentum, he said.
The survey's inflation gauges were mixed. A net 28 per cent of firms expect to raise their prices over the next three months, up five points from February to a little above their average from the past decade, but inflation expectations remain low at 1.8 per cent.
Westpac economist Satish Ranchhod said the softness in inflation expectation was in large part a response to last year's sharp decline in oil prices. But the resilience in pricing intentions, combined with a firm outlook for growth, reinforced his expectations that the Reserve Bank would remain on hold for some time.
Happy days
• A net 36% expect general business conditions to improve.
• A net 42% optimistic about their own activity.
• A net 32% of exporters expect volumes to rise.
• A net 21% expecting to lift staff numbers.
