Politics tops business concerns again as capital spending plans improve
New Zealand businesses remain broadly cautious ahead of the 7 November general election, according to independent economist Tony Alexander's latest Mint Business Insights survey, though a growing minority are reporting improving conditions.
The survey of 221 respondents found politics has again topped the list of concerns for the year ahead, cited by 55% of businesses, ahead of the general economic outlook and customer demand.
Alexander (pictured) said the political concern has been building steadily.
"Since late-2024 the degree to which the business sector is concerned about politics in New Zealand has appreciably climbed," he said, adding that "as we approach the general election and in light of the outcomes of recent polls these concerns are likely to remain high."
Among the concrete policy proposals under debate: the Labour Party has pledged to restore the Reserve Bank's dual inflation-and-employment mandate if elected, reversing a framework the National-led government removed in December 2023.
Property sector feels the pinch of pre-election caution
The property and mortgage sectors were among those most directly affected by the political uncertainty. One respondent in mortgage broking and advisory described a "pause in lead up to election. Bloody oil prices!" while a residential real estate respondent said "many clients are awaiting the outcome of November 7, which will have a huge impact on the housing market."
That caution comes on top of a confirmed rate rise: the RBNZ lifted the OCR to 2.75% on 2 September, citing inflation running at 4.1% — well above its 1–3% target band — adding a second layer of pressure to pre-election hesitation.
Alexander's own analysis noted "flat real estate activity and an over-supply of rental accommodation which is suppressing rents and reducing investor interest in property" as a broader theme across responses.
Spending intentions improve despite the caution
Even so, some indicators are turning more positive. For only the second time since the survey began in March 2023, more businesses reported plans to raise inventory levels than lower them, while capital expenditure intentions have also strengthened.
Technology and digitisation remain the top area for planned spending increases, with staff training rising notably this month. Net expectations for business revenue over the coming year sit at 46% better, though Alexander cautioned there is "no clear fresh upward movement in revenue expectations underway despite widespread hopes" that 2027 would bring improvement.
Staff availability concerns have also crept higher, with a net 14% of businesses reporting it is harder to find good staff, against a backdrop of unemployment sitting at a cyclically high 5.6%.
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