New Zealand businesses expected to grow next year
Grant Thornton, New Zealand, has analysed the country’s business climate. The study aims to assess market trends and short-term growth prospects. The results show that New Zealand businesses are preparing for change and increased activity.
Survey results
The company surveyed 200 business owners and executives for the study. The majority are optimistic and are preparing for positive change in 2025. This optimism prevails in the business community despite the challenges they face. New Zealand, like other countries, faces economic challenges and rising inflation. However, high interest rates and a slowing market are not deterring local businesses.
The results of the survey showed that:
– 2% of business respondents were very optimistic;
– 51% described their mood as slightly optimistic.
A similar survey in 2023 showed these sentiments:
– 4% of respondents were very optimistic;
– 32% of respondents considered themselves slightly optimistic.
Analysts note that the New Zealand business confidence indicator has reached an 18-month high. At the same time, pessimism about cost growth remains high. Businesses are actively working to increase revenues and believe they will be more successful in 2025.
In 2023, 50% of respondents increased revenues by more than 5% in 12 months. In 2024, the proportion of such companies is 40%. High interest rates and inflation are hampering development. Although experts point to a possible reduction, the government has not yet announced a new interest rate review.
Market problems
The head of Grant Thornton, Greg Thompson, noted that business sentiment is positive. It continues to strengthen, even in the face of challenging conditions in which businesses have to operate. The results of the survey show that the majority of local entrepreneurs are confident about future growth.
Analysts believe that the following processes will contribute to strengthening business optimism:
– changes in the country’s government apparatus;
– introduction of measures to stimulate the economy;
– stabilisation of the inflation rate;
– a reduction in interest rates.
Overall, the picture for New Zealand is quite optimistic. However, there are challenges. Large-scale redundancies have occurred in several sectors, and several companies have cut back and made losses.
In the current survey, the percentage of companies expecting to raise prices has fallen. In 2023 it was 52%, and in 2024, 34%. However, companies are noticing a decline in demand. Currently, 16% of companies have confirmed a lack of orders. In 2023, there were 9% of them.
Local entrepreneurs are aware that raising product prices is not the answer. Therefore, many of them are focusing on process transformation and the introduction of advanced technologies.
