NZIER's latest Quarterly Survey of Business Opinion (QSBO) shows a marked improvement in business confidence in the September quarter.

A net 5 percent of firms expect a deterioration in general economic conditions over the coming months - a significant drop from the net 40 percent that expected a downturn three months ago.

NZIER deputy chief executive Christina Leung says demand was quite weak over the September quarter, but expectations have gone up for the subsequent months.

"Expectations for the next quarter are looking more positive, and that's particularly the case for sectors such as retail and services - to the extent that these are the sectors that are more exposed to the household sector."

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