Business confidence has fallen sharply in the three months since February’s historic high, with negative sentiment more than doubling as the economic fallout from the war in Iran ripples through Auckland’s business community.
The Auckland Business Chamber’s May 2026 Business Confidence Survey shows 54% of businesses now rate overall confidence as negative or very negative, up from 25% in February, and the share expecting the economy to decline has more than tripled, from 7% in February to 24% now.
Simon Bridges, CEO of the Auckland Business Chamber, says the context is critical.
“February’s results were real. Businesses were feeling better, conditions were firming, and we called it the strongest confidence reading since 2022. What’s changed since isn’t a domestic story; it’s a global one.”
“The strikes on Iran began on February 28, eight days after our February survey was released. Much of what’s moved since, energy costs, inflation anxiety, geopolitical risk; all trace back to that event. New Zealand businesses are absorbing an external shock they didn’t see coming and couldn’t plan for.”
The clearest evidence of the shock’s impact is in energy costs. The share of businesses finding energy costs unaffordable has jumped 15 points in three months, from 40% to 55%, the single largest move of any indicator across the survey. With New Zealand reliant on imported fuel and no domestic refinery, businesses are directly exposed to any disruption to global oil supply and pricing.
Geopolitical risk has surged from a background concern to a front-of-mind one. Just 25% of businesses cited international trade and geopolitical risks as a top-three concern in February. In May, that figure is 45%, a 20-point rise in a single quarter, reflecting the speed with which the conflict has registered across the business community.
Inflation and interest rate anxiety has also climbed again, from 44% in February to 55% in May, unwinding recent progress on this front. “Businesses had started to believe the rate environment was stabilising,” Bridges says. “An oil shock puts that in doubt. If energy prices stay elevated, the path back to lower inflation gets harder.”
Consumer confidence and demand remain the single biggest concern, cited by 62% of businesses, higher than February’s 55%, underscoring that the fundamental constraint on recovery hasn’t changed. Until households feel confident spending, businesses remain cautious, and nearly half are already seeing fewer customers pay on time.
Among the deterioration, some indicators have held firmer than the headline suggests. Investment intentions are holding, with 50% of businesses planning to invest in the next 12 months, down only modestly from 54% in February. And 43% still expect revenue to grow over the coming year, down from 55% in February but not a collapse.
“Businesses haven’t abandoned the recovery story,” Bridges says. “They’re adjusting to a more uncertain world. Investment intentions holding up tells us there’s still underlying confidence in New Zealand’s direction, but the external environment has made the near term harder to read.”
Hiring intentions have continued a gradual but consistent decline, with the share planning to hire falling from 41% in February to 36% now. If that trend continues, it will eventually show up in the wider labour market.
Bridges says the government’s response to the energy cost question will be a key test in the months ahead.
“We had an open-ended question on what businesses want from government: fuel costs, inflation, and consumer confidence dominated. Businesses aren’t asking for handouts. They’re asking for policy settings that don’t make a hard external environment harder. That means disciplined fiscal management, no new cost impositions on business, and a clear focus on demand.”
“February showed us what recovery looks like when external conditions allow it. The task now is to hold the line, manage through the shock, and be ready to build again when conditions allow.”
Since the survey closed on 10 June, a peace deal ending the US-Iran conflict was announced on 14 June. Sentiment may therefore reflect peak uncertainty.
Key findings (Feb 2026 to May 2026)
Business confidence
- Negative/very negative: 25% to 54% (+29 pts)
- Positive/very positive: 32% to 15% (-17 pts)
Economic outlook (next 12 months)
- Economy will improve: 52% to 34% (-18 pts)
- Economy will decline: 7% to 24% (+17 pts)
Business performance (past 3 months)
- Below expectations: 36% to 45% (+9 pts)
Revenue
- Revenue down year-on-year: 41% to 45% (+4 pts)
- Revenue up year-on-year: 38% to 31% (-7 pts)
- Expect revenue to increase: 55% to 43% (-12 pts)
Costs and energy
- Expect costs to rise: 78% to 85% (+7 pts)
- Energy unaffordable: 40% to 55% (+15 pts)
Hiring and payments
- Planning to hire: 41% to 36% (-5 pts)
- Fewer customers paying on time: 36% to 48% (+12 pts)
Top business concerns
- Consumer confidence and demand: 62% (+7 pts)
- Inflationary pressure and interest rates: 55% (+11 pts)
- International trade and geopolitical risks: 45% (+20 pts)
- Productivity and growth: 29% (-7 pts)
- Cashflow and accounts payable/receivable: 28% (-2 pts)
About the survey
The Auckland Business Chamber Business Confidence Survey was conducted between 25 May and 10 June 2026 from businesses across Auckland. Respondents span all major industries and business sizes, with small businesses (1 to 50 employees) making up 75% of the sample.
