Business confidence took a knock over August but the result was better then expected, according to ANZ's chief economist.
The bank's latest survey showed headline business confidence had fallen to a net negative 41.8 percent for August, down from 32 percent the month earlier.
The more closely followed view of firms' own future was down by 8 points, with a net 17 percent expecting conditions to get worse in the next year.
"It was encouraging to see that the activity indicators didn't actually slip that much as August went on given that Covid-19 was rediscovered in the community and of course Auckland went into Level 3 lockdown," ANZ chief economist Sharon Zollner said.
"The move in most of the activity indicators was actually pretty muted."
Export, employment and investment intentions among businesses all fell slightly on July levels.
However, headline confidence in the construction sector made large gains on the month earlier, up 10 points to a net negative 16 percent.
"I think that's reflective of the housing market has responded very vigorously to falling mortgage rates and also the easing of credit conditions because of the removal of the LVR restriction."
Zollner said the question was how long the boost in confidence could last and whether there would be a rebound in commercial construction, which is less positive then residential activity.
"Although the changes in the data after Covid reappeared were relatively muted, the fact remains that activity indicators are sitting at levels consistent with recession."