New Zealand Businesses Show Confidence with Increased Investment Plans

Economic uncertainty continues to challenge New Zealand businesses, yet a notable shift towards increased investment is emerging. According to the 2025 Business Sentiment Survey conducted by BusinessNZ, 68% of the 130 participating members anticipate maintaining or increasing their capital expenditure compared to the previous year. This marks an improvement from the 61% recorded in 2024, while the proportion of those expecting to reduce investments has decreased from 33% to 25%.

Shifting Concerns and Confidence Levels

Katherine Rich, Chief Executive of BusinessNZ, highlighted that these investment intentions serve as a strong indicator of business confidence. The 2025 survey results suggest a gradual improvement in the economic landscape, despite lingering uncertainties. When asked about their primary concerns, the majority of respondents pointed to the unpredictability stemming from potential reversals of government policies following elections. This concern has replaced the financial issues, such as interest rates and inflation, which dominated discussions in the previous year.

In addition to policy uncertainty, over half of the respondents, specifically 52%, identified a lack of demand as a significant issue, while 38% expressed concerns about stagnant economic growth. These factors combine to create a complex environment for businesses navigating the New Zealand market.

Taxation and Competitiveness Issues

The corporate tax rate in New Zealand remains a contentious topic within business circles. Currently set at 28%, New Zealand’s corporate tax rate ranks as the eighth highest among the 38 OECD countries. A significant 61% of survey respondents believe that the current rate is either too high or insufficiently competitive to attract foreign investment.

As businesses adapt to the evolving economic climate, the results of the 2025 Business Sentiment Survey reflect a cautious optimism. The increased willingness to invest, combined with clear concerns about government policy and taxation, underscores the nuanced challenges facing New Zealand’s business community in the coming year.