During 2009's fourth quarter, business confidence across New Zealand declined, adding more indications that the economy is facing a very gradual recovery from recession.

A total of 31% of the companies surveyed in the year's last quarter said that they were expecting the economy to improve in the coming 6 months, down from the 10 year high that had been reached in the third quarter when 36% of the firms believed that the economy would be better over the coming 6 months.

The figures have been confirmed by the New Zealand Institute of Economic Research.

"The recovery is definitely taking place. The Reserve Bank is right to start raising rates in the middle of this year. There isn’t much urgency from an inflation point of view to be raising rates earlier", said Shamubeel Eaqub, principal economist at the institute.

Lower confidence among business people has added to signs that growth this year would not go beyond the 3% figure predicted by the Reserve Bank.

Businesses across New Zealand continue to remain optimistic, "but are waiting for reality to catch up with expectations".