Nicola Willis accepts her low ranking as she takes questions at 'Mood of the Boardroom'.
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New Zealand’s top business leaders’ optimism in the economy has waned from last year’s nine-year high.
Respondents to the Herald’s 2025 Mood of the Boardroom survey rated their confidence in the New Zealand economy at 2.81/5 on a scale of 1-5, where 1 signifies “much less optimistic” than a yearago and 5 represents “much more optimistic”. That is down from last year’s score of 3.23/5.
The softer outlook reflects a fragile domestic recovery that has been overshadowed by both global trade uncertainty and lingering weakness in consumer confidence.
“Confidence is gradually, almost reluctantly, improving locally, but uncertainty caused by US tariffs and geopolitics is allowing us to hang on to our newly ingrained pessimism,” says EMA chief executive John Fraser-Mackenzie.
Others highlight that although the agribusiness sector is doing well, the traditional link between high dairy payouts and wider domestic confidence is yet to be seen.
“Consumer confidence remains very subdued and, while we are seeing recovery first in the regions, it is not at the pace one would expect given the dairy payouts that historically provide the stimulus,” says Mitre 10 New Zealand boss Andrea Scown. “Our own customer insights point to a savings mindset. Folk don’t feel out of the woods yet.”
Andrea Scown. Photo / Dean Purcell
Another CEO adds: “My sense is the economy is very gradually improving, but it is slow. New Zealand feels like it has turned the corner, and things are improving, but we will need to see more evidence of this.”
Independent chairman Craig Stobo says the shift underway is structural as much as cyclical: “The required painful adjustment from debt-fuelled central government expansion to a private-sector, export-led recovery is underway. The business moods in Wellington and Wyndham are very different as a result.”
Institute of Directors chief executive Kirsten (KP) Patterson adds: “We have progressed from survive to 25, to survive through 25, and are now facing ‘not yet fixed in 26’.”
Tariffs, tensions and a global drag
CEO optimism in the global economy has also slipped, dropping from 3.06/5 last year to 2.63/5.
Executives cite international trade tensions and geopolitical volatility as major headwinds.
“It feels like the global economy is still deep in the tariff tailspin,” says Tourism Holdings CEO Grant Webster. “Internationally, I think the uncertainty and disruption caused by the US tariffs will offset underlying improvements.”
Tourism Holdings Limited CEO Grant Webster. Photo / Supplied
Pan Pac Forest Products managing director Tony Clifford points to China as a persistent drag on sentiment. “Soft market demand, driven by poor housing capital returns, was already evident before tariff wars exacerbated the situation,” he says.
Another CEO, recently returned from international travel, stresses that New Zealand’s challenges are not unique. “Most economies are in a similar state as our own – in fact, New Zealand is faring far better than many other countries.”
Others remain cautiously hopeful. “Hopefully, New Zealand is turning the corner and has already been through the worst of the economic reset,” says an investment boss. “The biggest risk is that, as a small open economy, we are knocked off course by the general deterioration of global trade rules and multilateralism.”
Several warn that geopolitics remains the wildcard. “The twin threats of geopolitical risk and the adverse effect of Trump’s ‘Liberation Day’ tariffs have made the global economic outlook much less certain,” says Roger Partridge, chairman of The New Zealand Initiative.
