The ISM-NY Inc. report said the city's Index for Current Business Conditions rose from 51.4 percent in August to 52.9 percent in September.
The six-month outlook for businesses dropped from 61.3 percent in August to 56.4 in September.
The report said the six-month outlook index was at an 11-month low.
The overall conditions index, while improving, did not reach July's level of 55.2 percent, nor did it come close to the year's peak, which occurred in March with the index at 67.4 percent.
Furthermore, the current business conditions index held above 60 percent from January through April. The low point of 2012 so far was 49.7 percent in June, while the low point over the past 12 months was in October 2011 with a reading of 45.7 percent.
For September, the revenues index at 55 percent was the highest it has been in four months, while the index measuring expected demand reached 62.5 percent.
The employment index for September fell to 52.8 percent from 55 percent in August. The index was higher than the 48.8 percent reading of September 2011, however.
Figures below 50 indicate a contraction, while higher numbers indicate growth.