Cautious increase in confidence during uncertain times
The MYOB 2025 Business Monitor indicates a modest rise in SME confidence from 40% to 46%, though 32% of respondents still anticipate economic decline. Recent media coverage and anecdotal evidence suggests a mixed bag of economic performance with growing anxiousness and some optimism regarding automation, robotics and artificial intelligence.
From recent news, the current hold on the Official Cash Rate (OCR), and potential signals for future decreases stood out. It mirrors prevailing concerns about economic growth but simultaneously present several opportunities:
- Refinancing high-interest debt, such as credit card or tax debt, is particularly relevant amid increased IRD-driven liquidations.
- Financing capital investment—including technology upgrades or premises expansion—is supported by incentives like the Investment Boost tax credit. Technology is usually in the top 5 of capital expenditure and is becoming more prevalent with growing discourse on AI and automation, particularly when studies frequently rank New Zealand low in AI readiness and adoption. Factors such as negative net migration, uncertain growth prospects, and public scepticism may have also contributed to the Government’s relaxed AI regulations and establishment of Invest New Zealand to attract innovation-focused foreign investment.
- Using finance for equities, commodities, and financial instruments—including listed shares, bonds, and cryptocurrencies—has become an increasingly common discussion point. We recommend discussing risks and returns with a registered investment advisor.
- Opportunities to purchase residential or commercial properties are emerging as sales and listings increase while prices remain stable. Lower interest rates may be encouraging buyers, or vendors can no longer wait out the return to the peaks of 2021. Either way, this could introduce new opportunities, possibly ones where the rental yield actually exceeds interest rates!
With that said, we are talking to many of our clients about stricter lending requirements; debt to income (DTI) ratio’s introduced in early 2024, more cumbersome application processes, and a general reluctance around business lending have all been sighted as impediments.
Next Steps
If you are concerned about IRD debt, we strongly encourage you to seek assistance. Contact us to discuss options before the IRD acts. For those considering capital expenditure or property investment, we can provide forecasting and cash flow analysis essential for robust business planning and loan applications. We also know some great mortgage brokers that can help with the loan application process and equally great investment advisors that can discuss various investment options.
What I’ve Been Reading
- Reserve Bank holds OCR at 3.25%, hints at cut
On July 9, the RBNZ kept the Official Cash Rate at 3.25%—pausing its easing cycle—while signaling further cuts likely by August or September, assuming inflation remains contained around 2.5%
- Increase in IRD imposed liquidations
Both the NZ Herald and LawNews released details of an increase in liquidations, with approximately 70% being attributed to the IRD, the highest number of IRD liquidations since 2020.
- Government release its National AI Strategy
According to RNZ the strategy and guidelines released puts New Zealand among the most relaxed nations when it comes to AI regulation.
- Manufacturing remains in contraction
June PMI (Bank of New Zealand–Business NZ) edged up slightly to 48.8 (from 47.4), but remained below 50, indicating ongoing contraction. New orders index rose to 51.2, suggesting cautious optimism
- Q1 GDP outpaces expectations
New Zealand’s economy grew by 0.8% in Q1 (vs. 0.7% forecast), bouncing off recession last year. This stronger-than-expected growth supports the RBNZ’s cautious stance.
- Net Migration Loss
Confirmation of a 30,000 net migration loss from New Zealand to Australia for the previous year. The highest since 2012.
- Establishment of Invest New Zealand
The government announced formation of “Invest New Zealand”—a dedicated agency (initially within NZTE) to drive inbound investment and innovation.
- Median house prices stay stagnant while sales and listings increase
House Price Index showed little movement in May while the number of properties sold increased by 8.9% month to month and listings rose 2.9%.
Thinking of Selling? Now Might Be the Right Time
By Satish Kathiriya, Client Manager
If you’re considering selling your business, current market conditions are pointing in your favour.
Right now, we’re seeing strong buyer demand, historically low interest rates, and a shortage of quality businesses on the market. At the same time, a growing number of business owners, many nearing retirement, are preparing to exit. That means more listings are expected soon, and savvy owners are getting ahead of the wave.
Getting your business sale-ready isn’t just about timing, it’s about preparation. Understanding the key value drivers, strengthening your competitive edge, and having a clear plan in place can make all the difference.
If you’re curious about how to get started or want to understand your options, we can help. Let’s work together to put a smart plan in place.
What I’ve Been Reading
Demand for businesses is growing
In June, RNZ reported that high unemployment and fewer traditional job opportunities have sparked increased interest in business ownership. Link Business Brokers and ABC Business Sales both noted significant lifts in enquiries and sales, despite a shortage of listings.
NZ’s ageing business owners
According to the CPA Australia Asia-Pacific Small Business Survey, New Zealand has the highest percentage of business owners aged over 50 among surveyed countries, with 64% in this age group. That points to a potential uptick in businesses coming to market in the near future.