Firms lift prices, boost recruitment amid cautious optimism
New Zealand businesses are ramping up hiring and preparing price increases as the economy improves, but political and interest rate uncertainty are tempering the mood, according to the latest Mint Harvey Cameron Group Business Insights with Tony Alexander.
The February report is based on responses from 349 businesses across more than 30 sectors, from construction and manufacturing to IT, retail, and professional services. Independent economist Tony Alexander (pictured) says the aim is to capture “real time insights into what is happening in various sectors”, with firms free to highlight whatever developments they see as most important.
Economy, customer demand, and politics top concern list
When asked what worries them most over the year ahead, firms once again pointed to the overall economic outlook, customer demand, and politics. Cyber risks, supply chain issues, exchange rate volatility, and climate change are currently ranked as lower‑tier concerns.
The survey shows that earlier euphoria has faded somewhat since the strong optimism seen going into Christmas. Businesses remain guarded about how robust the recovery will be, with Alexander noting that “there has been some backing away from the high optimism displayed going into Christmas. Concerns are strong about the election bringing policy changes and increased costs whilst high uncertainty surrounds the offshore trading environment.”
An improving economy and earlier Reserve Bank rate cuts mean worries about outright recession have eased since late 2024, but the share of firms worried about where interest rates are heading has jumped to 27%, from just 8% three months ago. Alexander links this to “the recently higher than expected inflation outcome, rises in wholesale interest rates, and forecasts of monetary policy tightening this year,” highlighting that rate risks are firmly back on the radar.
Recruitment spending surges as labour market tightens
On the operational side, firms are getting ready to grow. The strongest upward trend in spending intentions is in recruitment, with the survey highlighting that “businesses are quickly bringing forward plans to boost recruitment.” Alexander says the improvement from the middle of last year likely reflects expectations of stronger customer flows and a growing need for extra staff, alongside an awareness in some sectors that shortages of good people may already be emerging.
Technology, strategy and social media also rank highly for additional investment, while inventory spending has turned negative again and climate‑related investment remains weak.
Labour availability is emerging as a key issue. A net 8% of firms say they are now finding it harder to secure the staff they want, down from 15% two months earlier but still indicating the labour market “has entered a tightening up phase.”
Pricing power returning, revenue optimism strong
Pricing plans are also shifting. Alexander reports that “business expectations for higher revenues are strong, but they are raising their plans for increasing selling prices over the coming year.” A net 8% of firms intend to lift prices over the next 12 months – the highest since March 2024 and a sharp turnaround from August 2024, when a net 26% expected to cut prices during the recession. What’s notable, he says, is that these price intentions are rising even though there is “no obvious extra lift in cost pressures currently underway”, suggesting many businesses are looking to rebuild margins that were squeezed hard through the 2022–25 period.
Revenue expectations remain upbeat, with a net 55% of respondents forecasting higher turnover in a year’s time. However, expectations for staff morale and mental health have softened, with only 17% expecting workplace wellbeing to improve, down from 30% in November and December.
Overall, the survey paints a picture of an economy moving into an upswing: firms are planning to hire, invest, and raise prices, but remain wary of political change, interest rate risks, and uneven demand across sectors.
The survey results land just after the Reserve Bank’s 18 February 2026 decision to hold the OCR at 2.25%.
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