Business Performance

Looking at the key drivers of negative business performance sentiment, leaders are feeling least positive about external economic factors, with just 27% feeling positive about this measure all or most of the time in the past two weeks. This is unsurprising given New Zealand's negative quarterly GDP growth rate for three quarters of 2023, high interest rates, an ongoing inflation battle, and high cost of living.  

This economic pressure is likely trickling down to businesses’ cash flow and financial performance, both of which feature in the five business performance measures that leaders feel least positive about. And perhaps because of this financial pressure, workloads have come to the fore as a source of negative sentiment for New Zealand business leaders. With our survey showing less concern around labour supply and employee performance and motivation, financial concerns may be driving some businesses to take on more work with fewer resources in a bid to conserve costs, resulting in higher workloads.  

External political factors are also a cause for concern for business leaders, with just 40% of leaders feeling positive about this measure – which includes local and international elections, government policy direction, geopolitics and global trade wars, and an uncertain political environment. With the new coalition government’s first Budget to be unveiled on 30 May, plus ongoing geopolitical tensions, it’s clear leaders are feeling unsettled about the uncertain political outlook. 

As evidenced in our previous surveys, business leaders tend to be more confident about their future business performance than their current outlook. While just 53% of respondents have felt positive about their overall business performance in the two weeks prior to the survey, this positive sentiment jumps to 60% when looking ahead six months.  

The upcoming Budget may be driving this more positive future sentiment, with business leaders anticipating the delivery of pro-business policies that the Government campaigned on. However, positivity about external political factors remains low when looking to the future, showing business leaders remain cautious about the impact of politics – whether local or international - on their business operations. 

Looking ahead to six months’ time, business leaders are feeling most confident about their progress in meeting regulations and compliance, performance of systems and technology, and their general risk management profile. They expect to feel much more positive about workloads and financial measures than they do currently, suggesting hope may be on the horizon.