The economy seems to be stuck in second gear, according to the latest National Bank Business Outlook.
The bank, which is part of ANZ Banking Group, said a downward slide in business confidence had been arrested, but only marginally.
A net 15 per cent of respondents expect business conditions to improve over the year ahead, up from a net 13 per cent last month, the bank said.
Firms' own activity expectations - a more relevant indicator of economic momentum than confidence itself - nudged up.
A net 24 per cent of respondents expect more activity out of their business over the coming year.
"It's still below average, but within striking distance of it," the bank said.
The survey showed employment and investment intentions had shifted higher.
"However, somewhat perplexingly, these positive expectations are being formulated at a time when profit expectations are being pared back."
There were soft spots, with just nine per cent of businesses expecting to export more over the year ahead. The last time exporter confidence was lower was in May 2009. The construction sector showed the greatest deterioration in confidence.
"The economy seems stuck in second gear," the bank said. "The clearest macroeconomic trend is the lack of one," the bank said.
"That's what happens when structural forces collide with each other and get intertwined with cyclical support variables such as low interest rates."
