2degrees’ 2025 Shaping Business Study has found New Zealand’s business sector is at its most optimistic since the survey began in 2021, with significantly more optimism than in 2024.
The survey, conducted by insights and research agency Matter, engaged more than 500 business decision-makers around Aotearoa between mid-April to early May 2025.
It explores the key issues, trends, concerns and opportunities shaping the business landscape for owners, CEOs, directors, general managers, and C-suite leaders.
Moving in the right direction
The research found that 45% of those surveyed say they feel more optimistic about the outlook and prospects for their business compared to the previous year.
In 2024, 34% said they felt optimistic about the coming year.
The reasons business leaders responded with greater optimism were: business growth (45%), growth in customers or demand (40%) and improving products, services or sites (38%).
“We haven’t seen optimism this high in years, with business owners seeing opportunities to grow and introduce new products and services according to the latest 2degrees Shaping Business report,” says Andrew Fairgray, 2degrees’ chief business officer.
“Productivity is also on the rise. More Kiwi businesses are coming to terms with what recent technological advances like AI can and can’t do, and they’re starting to employ these tools to improve their businesses. This is saving time and money, which allows these businesses to reinvest in other areas.
“At 2degrees we’ve always been big believers in how technology can be used to improve businesses by freeing up time and giving business owners the opportunity to improve what they offer their customers,” Fairgray adds.
From survival to expansion
The proportion of businesses identifying as ‘Thriving’ has grown to 19%, reflecting renewed optimism after a challenging period and expectations of revenue growth in 2026.
More than two thirds of businesses surveyed said that growth is a key business goal for the year ahead and the focus is on growing profit or revenue.
This sentiment is significantly stronger among larger businesses (in terms of both size and turnover), and highlights a shift from a cautious ‘maintenance’ stance to a more bullish growth agenda.
Embrace the latest technology
46% of Kiwi businesses reporting they are more productive now than they were in 2024.
The adoption of AI is a major driver of this improvement, with one in four businesses attributing their productivity gains to these technologies. This suggests a growing recognition of the value digital tools can bring to operations.
Meanwhile, fewer businesses now believe that hiring more highly skilled staff will boost productivity, with that figure dropping from 33% last year to 26% in 2025. This indicates a shift from talent acquisition toward greater reliance on technology.
Fairgray says: “These findings should be seen as a positive signal – it’s not about reducing headcount, but about empowering the talented people we already have. By embracing the latest technology, New Zealand businesses are unlocking new levels of productivity and enabling their teams to do their best work. This is an encouraging shift to see.”
Rising costs, shifting customer landscape
Despite the positive trends in productivity, businesses continue to face the challenges of reduced customer spending and increased input costs.
Nearly 80% of businesses surveyed have seen their operating costs increase in the past year, and increasing at higher rates than they were in 2024.
To cope with these challenges, about half of all businesses plan to raise their prices in the next 12 months, with the rate of increase also trending higher than in 2024.
However, businesses – especially larger companies (51+ employees) – are twice as likely to describe current market competition as “healthy” rather than “poor.”
Helping businesses
Businesses have identified the types of support they will need in the coming year.
Cashflow remains a key growth driver, while better technology and digital skills are becoming more prominent in 2025.
Meanwhile, tax incentives and breaks were the most frequently mentioned forms of government support. Many also highlighted the need to address inflation and the rising cost of living as key priorities for economic assistance.
For more information on the Shaping Business Study, and to download the report for free, visit the 2degrees website.
