Business confidence is at an all-time high throughout the country, despite somewhat lacklustre profits.

That's revealed in the latest quarterly survey of business opinion by the New Zealand Institute of Economic Research.

It shows the economy is not as strong as people think it is.

There is growth in the economy, but it's small compared to growth in business optimism.

Many businesses report strong intentions to hire more staff, and there's increased residential building activity forecast.

A surge in retailer optimism has also resulted from sales growth throughout the Christmas shopping season, and there's an expectation for that to continue.