Business confidence has improved, after a pick-up in demand

NZIER's latest survey shows a net one percent of businesses reported an increase in trading activity.

That's up from a net 37 percent decline in the previous quarter.

NZIER says businesses are still feeling downbeat, but pessimism is reducing.

Nearly 40 percent expect a deterioration in economic conditions in coming months, down from almost 60 percent.

The survey captured the effects of Covid-19 community cases on August 11, which caused a lift in alert levels.