SYDNEY, Oct 4 (Reuters) - New Zealand business confidence improved slightly in the third quarter amid signs that capacity pressures are starting to ease, although the New Zealand economy continues to remain tight overall, a private think tank said on Tuesday.

A net 42% of firms surveyed expected general business conditions to deteriorate compared with 65% pessimism in the previous quarter, the New Zealand Institute of Economic Research's (NZIER) quarterly survey of business opinion (QSBO) showed.

The survey's measure of capacity utilisation was 94.5%, from the previous quarter's 93.4%. (Reporting by Praveen Menon and Wayne Cole; Editing by Chris Reese)