Tony Alexander survey shows stronger revenue and staff outlooks despite mixed confidence
Business sentiment across New Zealand is shifting toward optimism, with more firms expecting stronger trading conditions through 2026, according to the latest MintHC Business Insights survey with Tony Alexander.
Economist Tony Alexander (pictured) said that while “most businesses continue to firmly report that current economic conditions remain very challenging,” expectations for next year are improving rapidly.
“Anticipation of firmer growth next year is encouraging more businesses to hoard good staff,” Alexander said.
The October survey drew responses from 390 business operators across a wide range of sectors, offering a snapshot of real-time conditions, concerns, and spending priorities.
Outlook improving despite current headwinds
The survey found that while challenges remain, businesses are growing more upbeat about 2026.
A net 53% of respondents expect revenues to improve over the next 12 months – the strongest result since the survey began in March 2023.
Confidence is also flowing through to the workforce. A record net 21% of firms expect staff morale to improve over the coming year, up from 9% last month, reversing the negative trend seen six months ago.
However, wider business confidence has softened. NZIER’s latest Quarterly Survey of Business Opinion showed a net 15% of firms expecting better economic conditions, down from 26% in the June quarter. Despite lower interest rates and greater competition among lenders, many firms remain hesitant to commit to new investment or hiring.
Political and economic uncertainty top business concerns
When asked what worried them most about the year ahead, businesses again pointed to the general economic outlook, customer demand, and politics – the same top three areas of concern cited for several months.
Alexander said that “concerns about the current state of the economy remain as high as ever while expectations for profitability have edged lower recently, perhaps because many costs continue to increase.”
He also noted that worries about interest rates have eased following recent RBNZ cuts, but that concerns about the state of politics are high, with many businesses anxious about the potential impact of a change in government next year.
Labour availability and cost pressures returning
Businesses reported that hiring conditions are tightening again. A net 1% said they find it easy to secure good staff, down from 7% last month and the weakest result since October 2023.
Alexander noted that “even before the effects of positive economic stimuli like lower interest rates, higher farm incomes, a lower dollar, and upturn in the consumer durables and inventories cycles kick back in, businesses are no longer finding staff plentiful.”
Many firms, he added, are hoarding skilled workers in anticipation of stronger growth, highlighting ongoing caution about future labour shortages.
Cautious spending, but stronger focus on technology and retention
The survey showed that businesses are directing more funds toward customer retention, technology (including AI), and social media presence.
Spending plans on climate-change mitigation continue to decline, while investment in advertising and recruitment is trending higher as confidence builds.
“In anticipation of firmer economic conditions next year, businesses are planning to increase spending on recruitment,” Alexander said. “Accompanying this trend is an underlying rise also in plans to spend on good workplace culture.”
Plans for remuneration are edging higher, but training budgets remain steady, and firms remain cautious about boosting inventory or large-scale investment until recovery becomes more certain.
Price outlook supports easing inflation trend
Only a net 5% of businesses said they plan to cut or hold prices steady in the coming year – up from -12% last month – signalling subdued inflation pressure in the near term.
Alexander said the result “bodes well for inflation over 2026.” However, he cautioned that “the prevalence with which many businesses have noted costs still rising suggests upside inflation risks further out.”
Key takeaway for mortgage advisers
For mortgage brokers, the findings suggest rising business confidence but continued caution on spending and expansion.
As competition for lending heats up, advisers may find new opportunities to support SME clients seeking refinancing or growth funding, particularly as lower rates and stronger hiring plans feed through to improved business sentiment in 2026.
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