"When you have strong business confidence workers feel more confident that they have got a job and are more likely to spend more," he said.
Northland, and Whangarei particularly, is seen as a good place for Aucklanders to invest in the property market, either as rentals or to move.
"It's very easy for a tradesperson in Auckland to sell up and move to Whangarei to set up here. It's a bit harder for a business to do that, but we will be seeing more of that in the future," Mr Collins said.
Westpac acting chief economist Michael Gordon said economic confidence moved into positive territory in Northland for the first time since June 2014.
A net 17 per cent of Northland households expect the region's economy to strengthen over the coming year.
Confidence in the region's prospects has improved for three quarters running, meaning Northland is no longer the most pessimistic region in the country.
"After being surprisingly downbeat in recent quarters, Northland residents are beginning to view the region's economy more favourably," Mr Gordon said.
"The improvement in dairy prices, high log prices, strong growth in visitor arrivals and rising house prices are all helping to boost prospects in the region."
He said Northlanders are also feeling more upbeat about their personal finances and the broader economic outlook.
The NZIER survey showed Northland businesses were far more optimistic about the future than the national average at the end of the December quarter.
Nationally business confidence remained high at the end of 2016, with a net 26 per cent of businesses expecting an improvement in economic conditions over coming months.
But business confidence in Northland surged from 23 per cent in the September quarter to 39 per cent of businesses in the region expecting an improvement in economic conditions over coming months.
When it comes to demand in their own business, a net 47 per cent of businesses saw demand improve in the December quarter, and a net 45 per cent expect an improvement in the next quarter.