Most businesses in New Zealand continue to be in survival mode, as the conflict in the Middle East and its crippling effect have added salt to an existing economic wound, latest research shows.
A survey from Research New Zealand, which interviewed 433 business owners and senior managers between March 24 and April 2, finds that more respondents were pessimistic than optimistic about their trading conditions.
A record 42 per cent of respondents stated they had ‘hardly ever’ felt ‘hopeful and optimistic’ in the last two weeks, or ‘not at all’. This compares with 22 per cent who said they had felt ‘hopeful and optimistic’ ‘all the time’, or ‘many times’.
About 63 per cent of businesses described the current economic situation in Aotearoa New Zealand as ‘bad’ or ‘very bad’. Around one-quarter predicted decreases in their revenue in the next 12 months, while 31 per cent expected an increase in their costs.
As a result, 52 per cent of respondents reported being focused on maintaining their business and keeping it roughly the same size. Approximately 14 per cent saw themselves downsizing, while 2 per cent were planning to close down.
In addition, 61 per cent of businesses said they were not planning any investment during the next 12 months. One in every two respondents stated they were concerned with the impact of the conflict in the Middle East on their business.
While businesses across sectors and sizes are experiencing high levels of stress, sole traders appear to be the most affected, the report shows.
“In our September 2025 State of the Business poll, much of the feedback related to the fact that most business owners were looking for greater certainty before they looked to grow, develop and invest in their business,” said Research New Zealand.
“While the domestic economy has continued to splutter in the interim, the conflict in the Middle East has put a further spanner in the works.”