Business survey and oil shock point to weaker demand, higher rates
New Zealand businesses have turned sharply more pessimistic, with Tony Alexander’s latest MintHC survey reporting “dour sentiment back in force” in April 2026.
Firms’ top concerns remain the general economic outlook, customer demand and politics, while worries about supply chains have leapt from 5% to 31% over two months as transport and input costs spike.
In contrast, concerns about access to finance are low and still edging down, and fewer firms are worried about finding the labour they need – signalling that credit conditions remain broadly supportive even as sentiment deteriorates.
The share of businesses expecting higher revenue over the next year has dropped to a net 10%, from 32% in March. Recruitment plans that had been improving since mid‑2025 have “been completely reversed”, Alexander (pictured) said, with firms freezing hiring and cutting staff training and workplace‑culture spending. Many are also reducing inventory and shelving capital expenditure.
Spending intentions highlight a clear defensive pivot: businesses are putting more money into resilience and technology, but are trimming advertising, social media, remuneration, staff training, workplace culture and new product development, pointing to tighter cash flows and slower expansion plans. Despite the pause in new hiring, staffing remains a challenge, with a net 10% of firms still finding it harder rather than easier to secure good people.
The Iran war and fuel surge are intensifying those pressures, with Westpac noting that New Zealand is now operating under heightened Middle East–related uncertainty and that cost pressures have risen sharply across transport, construction, forestry, and agriculture as diesel and shipping costs climb.
Comments from Alexander’s respondents reinforce the picture on the ground: mortgage advisers report a recovering housing market “dulled” by the Iran conflict, while residential builders and real‑estate agents say prospective clients are “sitting on their hands” as fuel and materials costs rise and election uncertainty builds.
Staff morale sags as more firms eye price hikes
Alexander’s survey also records a sharp drop in confidence about staff wellbeing, with a net 20% of firms expecting morale and mental health to deteriorate in the coming year; in December, a net 30% expected improvement, and he notes that “despondency abounds.”
At the same time, a net 14% of businesses now plan to raise prices this year, up from 4% in March, as they pass on higher input costs.
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