A Brief Look at the New Zealand Economy - October 2025

I have made a summary of my research from various recognised economists about what is happening with the New Zealand Economy. The information in this communication is for information purposes only and is not business or financial advice.

Economists are saying that it’s still tough out there for many business owners, but this month’s market feedback was considered ‘variable’ rather than ‘bleak’.

Retail and Hospitality - Uncertainty about the economic outlook is keeping wallets shut, causing stress for many businesses but particularly retail and hospitality.

Luxury Items - There were signs of life in big-ticket retail items such as vehicles and luxury items such as boats as interest rates fall.

Construction - Construction seems to be picking up a little, more in commercial than residential, but feedback says that it is a slow recovery. Also, competition is fierce causing tight margins.

Business Acquisitions - It has been a common theme in past recessions, that some businesses actively look to expand during the slowdown, through acquisitions. However they have recently had to compete harder to do so.

Labour Market - Research shows that the labour market remains fairly subdued, although the odd pocket of demand is picking up, for example, for IT Specialists as particular projects get the go ahead.

Manufacturing Sector - The manufacturing sector is being hit hard by higher energy costs and in some cases uncertain energy supply, as well as the negative effects of the slowdown in construction and discretionary spending. However, some investment in automation continues.

Dairy or Red Meat - There is a diverse regional picture. Regions with a strong dairy or red meat economic base are reporting more positive feedback than urban areas.