A National Bank survey shows a net 55% of businesses expect business conditions to deteriorate over the next year, but the result is a 3% improvement on last month.
Economist Khoon Goh says a drop in corporate tax rates and the free trade deal with China are positive.
However, he says New Zealand is still in negative territory. He says the data also shows firms are going on a hiring and investment strike, which in the current climate of capacity constraints does not bode well for the future.
Goh says despite the slight improvement, low business confidence remains a self-fulfilling prophecy.
He says the current situation needs to be put in context because New Zealand had five years of tremendous economic growth and a slowdown was inevitable.
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