Source: BusinessNZ
The latest BusinessNZ Planning Forecast shows that New Zealand’s economy has regained its momentum, with solid growth forecast through to 2028.
BusinessNZ Chief Economist John Pask says despite an earlier dip, the economy is showing resilience across a range of indicators.
“The ongoing conflict in the Middle East and heightened geopolitical tensions elsewhere continue to have an impact, but New Zealand’s economy has fared better than expected with annual growth nearing three percent by 2028.”
Pask says while uncertainty surrounding the upcoming general election has made investors more cautious, it hasn’t materially affected investment behaviour yet.
“Businesses are conscious of the risks both at home and abroad, but for the most part are getting on with business. Confidence is holding up, credit activity is increasing and both the Performance of Manufacturing Index and Performance of Services Index have returned to expansion.”
Sectoral performance is also improving. Agriculture remains the standout performer, supported by strong international commodity prices, while manufacturing, construction, tourism and services are showing signs of recovery.
Pask says growth is becoming more broadly based.
“Manufacturing has strengthened considerably and tourism is moving beyond its post-Covid recovery into a genuine growth phase. New Zealand’s substantial infrastructure pipeline should also create opportunities for domestic and international investment over the coming years.”
Inflation remains a concern, particularly given elevated fuel prices and other persistent cost pressures. However, inflation expectations have eased and headline inflation is forecast to move back within the Reserve Bank’s target band during 2027.
Pask says while the near-term direction is encouraging, sustained growth will depend on New Zealand addressing deeper structural and long-term challenges.
“Our three-year electoral cycle can encourage short-term thinking and policy reversals, our ageing population has major implications for how retirement incomes and healthcare will be delivered and funded, and an increasingly complex geopolitical environment leaves New Zealand exposed to decisions made by major international players such as the United States and China.
“How we respond to these issues now will determine whether we can secure stronger, sustained growth over the long term.”
The BusinessNZ Economic Conditions Index (ECI) is a measure of some of NZ’s key economic indicators. It sits at 13 for the September 2026 quarter, up 13 points on the previous quarter, and up 10 points on a year ago. An ECI reading above 0 indicates that economic conditions are generally improving overall; below 0 means economic conditions are generally declining.
The full Planning Forecast for the September 2026 quarter is available now at BusinessNZ.
Notes to editors:
- The BusinessNZ Planning Forecast is a quarterly assessment of New Zealand’s economic outlook, drawing on more than 30 economic indicators and forecasts from major banks. It includes the BusinessNZ Economic Conditions Index (ECI), which tracks changes in economic growth, monetary conditions, business and consumer activity, and the labour market. A reading above zero indicates improving conditions, while a reading below zero signals an overall decline.
- The BNZ-BusinessNZ Performance of Manufacturing Index (PMI) and Performance of Services Index (PSI) are monthly surveys providing an early indication of activity across New Zealand’s manufacturing and services sectors. A reading above 50 indicates the sector is generally expanding, while a reading below 50 indicates contraction. The further an index is from 50, the stronger the expansion or contraction.
- The BusinessNZ Network including BusinessNZ, EMA, Business Central and Business South, represents and provides services to thousands of businesses, small and large, throughout New Zealand.