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By Nona Pelletier of RNZ Economic and political uncertainty is keeping businesses from taking advantage of near-term growth and investment opportunities, with some business leaders expecting to become financially insolvent over the next 12 months. A semi-annual Business Performance Index (BPI) by accounting and advisory firm BDO indicates an increasing number of businesses were showing signs of improved underlying financial resilience, but not all. “Economic and political uncertainty continues to be a major influence on business leaders’ mindset, with overall business performance sentiment remaining at a near record low in the latest biannual BPI,” BDO advisory partner Kimberley Symon said. The April survey of 537 businesses tracked business performance sentiment and the leading issues. Retail (19%), tourism (36%) and construction (42%) business leaders were the least positive about their current financial position. Construction and retail business owners were feeling the pressure of market conditions most acutely, with cost-of-living inflation and softer consumer demand undoubtedly squeezing margins. BDO advisory partner Kimberley Symon. Photo / BDO About 40% of business leaders in these sectors were positive about their overall business performance, the lowest reading among major sectors and a notable decline since the September survey. In addition, 19% of construction business leaders and 3% of retail business leaders felt they were unlikely to meet financial obligations, or become insolvent, in the next 12 months. In sharp contrast, agribusiness and Māori business leaders were the most positive about their current financial performance (both 54%). Agribusiness (80%) and Māori businesses leaders (77%) were the most positive about the outlook with stronger export conditions for agricultural products, including dairy, benefiting their rural communities. Overall, the report indicated 7% more business leaders were feeling positive about their financial performance (42% in April 2026 versus 35% in September 2025). “This is only the second time an improvement in this measure has been recorded,” she said. Auckland business leaders were the most positive about their current financial performance (57%), compared with (39%) in the rest of the North Island and (18%) South Island. External economic (27%) and political factors (28%) were the two issues businesses felt least positive about, among the 19 attributes rated. Looking ahead six months, business leaders expected to continue feeling least positive about economic and political issues, followed by cashflow. However, labour supply and cyber risk were expected to move into their five lowest-scoring issues. South Island business leaders were the least positive about political, economic and financial factors. However, more South Island business leaders (37%) expected their net profit margins to increase over the next 12 months. “Business leaders are even more positive when looking ahead six months, with 49% nationally expecting to feel positive regarding their business financial performance,” Symon said. “The latest BPI survey findings suggest some businesses are starting to see early signs of financial resilience after several difficult years, but market conditions remain fragile and the international macroeconomic environment is still highly uncertain. The BDO report shows improved financial resilience in some sectors, but construction and retail remain under pressure. “Business conditions are moving at different speeds across regions and market segments, with business performance, investment and hiring intentions closely tied to economic exposure, inflationary impacts and industry mix. “It’s clear that many businesses are presently riding out the fuel-price pressures by passing on higher prices to consumers. Looking ahead over the next 12 months, nearly half of business leaders (46%) expect net profit margins to hold steady – and 29% expect margins to improve.” Still,...
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