This article was prepared by BDO and is being published by the New Zealand Herald as advertorial.
After a brief respite before the Government’s annual Budget unveiling in May, business performance sentiment has returned to its downward trend since 2022, declining to a record low in the latest biannual BDO Business Performance Index (BPI) report released today by accounting and advisory firm BDO.
The October BPI report (surveyed during September) tracks overall business performance sentiment and the leading issues on the minds of more than 530 business leaders nationwide. The report found that just 48% of business leaders nationally have felt positive about their business performance in the last two weeks, falling from 57% in April.
Mid-market business leaders have a slightly more positive outlook, with 58% feeling positive about their overall business performance in the last two weeks. In general, North Island business leaders are more positive about their overall business performance than their South Island counterparts.
The five factors which business leaders feel least positive about nationally reflect the challenging economic context, including; economic factors, cashflow, financial performance, political factors and business pipeline – the latter featuring in the top five for the first time.
“For a number of businesses under financial pressure, the theme of ‘survive to 2025’ is quickly turning into ‘find a fix in 2026’. Businesses that can ride out these challenging times will emerge more agile and resilient and will be able to take advantage of improving economic conditions. With a big driver of our economy being consumer sentiment, businesses are hoping the recent OCR cuts will improve consumer confidence and drive an increase in discretionary spend,” says Rees Logan, BDO National Business Restructuring Leader.
Interestingly, performance of systems and technology is a top five issue for mid-market businesses, likely reflecting the heightened importance of these factors as businesses gain scale, including future-proofing their systems to leverage AI opportunities.
Agribusiness leaders are showing the strongest business performance sentiment, while business leaders in the tourism and retail sectors have experienced the largest declines. Business performance sentiment among construction business leaders remains at a low point nationally, the same as when last surveyed in April 2025.
Looking ahead to 2026, expectations remain subdued. Business leaders’ expectation of business performance sentiment in six months’ time is at a record low since reporting began in 2022, with 56% of business leaders nationally expecting to feel positive about this. However, as is typical, the forward view is slightly more optimistic than the present.
“Beyond newer entrants and smaller players, we are now seeing more entrenched, longstanding businesses feel the brunt of the challenging economic context. Our ray of light will come when we see more of these established businesses show confidence to hire and invest – signalling the economy has turned a corner. In the interim, those businesses which address a core market need, have a clear proposition, serve diverse markets and bring in fresh thinking to support robust planning, will more often demonstrate financial resilience,” says Kimberley Symon, BDO Advisory Partner.
For more on the report findings and for practical tips and strategies to help your business navigate the current economy, view the October BPI report on the BDO website or contact your local BDO adviser.