Mood of the Boardroom: BusinessNZ chief Katherine Rich optimistic about growth from 2026

The Global Workforce Seasonal Visa (for up to three years) and the Peak Seasonal Visa (up to seven months) make it easier to bring in some international skills each year, says Katherine Rich. Photo / NZME

A leading advocacy group is confident the latest policy changes for business and investment will get New Zealand moving again, writes Graham Skellern

The Government’s policy changes on a number of fronts will filter through to improved economic conditions next year, says BusinessNZ chief executive, Katherine Rich.

The mood of business is mixed, she says. “There are two sides to the New Zealand economic story. Some businesses are doing well with record returns, particularly in the agriculture and horticulture sectors, but others are finding it extremely challenging and making decisions about whether to shut or remain open.

“A lot of the closures are linked back to the economic harm of the Covid pandemic – many firms spent their [financial] buffer and don’t have the resilience to pull though.

“The present situation reminds me of the late 1980s when the economy wasn’t doing well and jobs were hard to get. But there are economic cycles and we know we will pull out of it and thrive again.”

Rich says the New Zealand way is to be cautiously optimistic but the Government, in the last six months, has pulled the right levers with changes to the RMA and employment law and welcoming overseas investment through restructuring and creating the Invest NZ agency.

“The Prime Minister is going out and saying ‘New Zealand is open for business’ and some of the regulatory changes being made support this. They are meticulously going through sector by sector and seeing how they can make it easy to do business.”

Rich is optimistic for 2026 as the changes made by the Government will filter through into economic growth. “I hope by then the trade tensions will have settled and markets will have improved.”

She says the geo-political issues, such as the impact of US tariffs and tough manufacturing conditions have contributed to members reporting lower confidence. They are not investing to the same degree.

“Through the data we collect, we see a burst of expansion and then it retracts back again. The services sector has been in contraction the whole year, and that’s a reflection of the market out there.”

New Zealand business is a resilient group and is taking some comfort from the positives in the economy.

Katherine Rich

The BusinessNZ Performance of Manufacturing Index (PMI) recorded a return to expansion in July with 52.8, up from 49.2 in June (a PMI reading above 50.0 indicates activity is generally expanding; below 50.0 it is declining).

The Performance of Services Index (PSI) was 48.9 in July, up from 47.6 in June, and has never crossed the 50.0 mark into expansion for 17 months, though it is contracting at a slower rate. The closest it got was 49.5 in November last year after entering expansion in January last year at 52.1.

Rich, a former National MP and a year into her CEO role at BusinessNZ, says New Zealand business is a resilient group and is taking some comfort from the positives in the economy.

“The agricultural sector is doing well and this will flow through the economy, inflation is going in the right direction under 3% (2.7% at the end of June), and the first of the Fast Track projects are coming through.

“The ambition is that it remains Fast Track and not Slow Track. And the good thing about a pipeline of projects is that the politicians are starting to discuss a bipartisan approach to infrastructure.

“We’ve seen an improvement in the overseas investment settings and the Active Investor Plus Visa has been a successful initiative. The changes in immigration policy are starting the address the clear skills shortage in the country.”

Rich says the Global Workforce Seasonal Visa (for up to three years) and the Peak Seasonal Visa (up to seven months) make it easier to bring in some international skills each year.

“There is a requirement for the Ministry of Social Development to advertise the jobs for New Zealanders to take them on. So, it’s not open slather and I think Immigration Minister Erica Stanford has found the right balance.”

Rich says the updated procurement rules make it easier for local SMEs to bid for government work. The next step is giving New Zealand firms greater recognition in procurement rules for local government, which is a big spender.

“Many small businesses have been impacted by local government turning off the tap for different sorts of work.”

Rich says BusinessNZ will turn up the dial in advocacy and continue to be a strong voice for the business sector.

“We have the Affiliated Industries Group, which is made up of 80 different organisations and associations, and they are a great source of knowledge and expertise.

“We are looking at it sector by sector and identifying regulations that are holding them back. For instance, hairdressers and barbers are operating under rules that go back 40 years. The rules could also be holding back plumbers and tourism,” she says.

“The Ministry for Regulation is a great place to go and raise issues about whether the current rules in place are worthwhile or not. The policies have to be fit for purpose for New Zealand.”

Rich says, “We have to remind ourselves of all aspects of life in New Zealand. It’s a great place to live, set up a business and maintain a good lifestyle.”

BusinessNZ is an advertising sponsor of the Herald’s Mood of the Boardroom report.