2degrees has published research showing New Zealand businesses are moving beyond a post-pandemic recovery mindset. The survey found confidence is now tied more closely to resilience, productivity, and investment.
The company's Shaping Business study surveyed 555 business decision-makers across New Zealand and found a marked shift in how firms view the economic climate. Rather than waiting for conditions to return to pre-pandemic norms, many now appear to treat volatility as a permanent feature of doing business.
That shift is reflected in expectations for the year ahead. Sixty-one per cent of respondents said they expect revenue growth over the next 12 months, while 49% plan to increase investment.
Larger companies were more upbeat than the wider market. Among businesses with more than 50 employees, 78% expected revenue growth and 71% planned to increase investment.
The findings suggest confidence has not disappeared despite persistent cost pressures and geopolitical uncertainty. Instead, it is increasingly linked to practical issues such as productivity, technology use, and operational efficiency.
Cost pressures have also shifted. Utilities, insurance, and lease expenses have overtaken labour as the fastest-rising source of pressure for many businesses, suggesting fixed overheads are becoming a more acute concern.
Inflation and global instability remained prominent worries in the survey. The research also recorded rising concern about supply chain disruption, with respondents across several sectors calling for greater government support for supply chain resilience.
Pragmatic outlook
Andrew Fairgray, Chief Business Officer at 2degrees, said the long-running nature of the study made the latest results notable.
“For several years, many businesses held onto the belief that conditions would eventually stabilise and we'd return to something resembling pre-COVID normality,” Fairgray said.
“This year's report shows that mindset is fading, and what's emerging now is something more pragmatic. Businesses are no longer planning around a recovery cycle - they're adapting to a fundamentally different environment where productivity, adaptability, and strategic investment will be the key drivers of future growth.”
The report points to a widening gap between larger firms and smaller operators. Businesses with more than 50 employees were significantly more likely to report productivity gains, stronger investment, and greater use of artificial intelligence than smaller companies.
According to the study, 57% of larger businesses reported productivity gains, 71% reported investment growth, and 81% reported AI adoption. Smaller businesses were more likely to be dealing with economic uncertainty and rising operating costs.
A generational divide also emerged in the survey data. Businesses less than five years old and owners under 35 were among the most optimistic groups, while established firms and older owners were less positive.
Among businesses operating for more than 10 years, 34% said they felt less optimistic than they did a year earlier. The same pattern appeared among owners aged over 45.
AI focus
The study suggests the discussion around AI is becoming more practical. Rather than debating whether to adopt the technology, businesses are increasingly focusing on how to use it in day-to-day operations to improve productivity and efficiency.
“The conversation has shifted from 'Should we use AI?' to 'How do we actually make this work in a meaningful way for our business?'” Fairgray said.
Fairgray said the overall picture was not one of declining ambition, even as firms became more cautious about the conditions they face.
“There's still ambition in the market, but businesses are becoming much more pragmatic about what success looks like in this environment,” he said.
“The organisations performing best are generally the ones embracing change, investing in capability, and finding ways to stay agile despite ongoing uncertainty.”