by Metropol | January 21, 2026 8:33 am
After a long, cold stretch, the business community is finally seeing daylight. This time the shift is backed by hard data, not hope.
The latest business surveys point to a dramatic surge in confidence. Sentiment is now at levels not seen in decades. The ANZ Business Outlook shows headline confidence at a 30-year high, with a net 74% of firms expecting improved conditions. The NZIER Quarterly Survey of Business Opinion tells a similar story, recording its strongest confidence reading in more than a decade. For the first time in years, the recovery feels tangible rather than theoretical.
But the upswing isn’t landing evenly. Manufacturing is clearly leading the charge, emerging as the most optimistic sector, with firms actively expecting better times ahead. Construction and building are also turning a corner. While today’s demand still feels patchy, the forward pipeline paints a very different picture. Housing and commercial projects are stacking up over the next 12 to 24 months, and on the ground, activity is undeniably starting to ramp up.
Retailers and small businesses, however, are standing at a crossroads. Many are still anchored to past performance. Discretionary spending has remained subdued as households focused on essentials, and caution has been understandable. But conditions are shifting. New orders are picking up, interest rate relief is beginning to flow through the economy, and confidence is broadening beyond a handful of standout sectors.
The real risk now isn’t optimism – it’s over-correction. Around 80% of businesses remain rightly wary of rising costs, but there is a fine line between discipline and self-sabotage. Cutting too deeply – particularly in marketing, systems, and capability – risks missing the upside just as the recovery gains traction. As household confidence lifts, discretionary spending returns faster than many expect, and it flows to the businesses that stayed visible and prepared.
This is where small and medium enterprises have an advantage. Agile firms that invest now in efficiency, customer reach, and brand presence are best positioned to capture the next phase of growth. Those that starve the engine may survive – but they won’t lead.
The message is simple: stay lean, stay smart but don’t pull the handbrake just as the road ahead begins to clear.
For a no-obligation review of your business and how best to position it for the recovery, contact EBI for an initial discussion.
Source URL: https://metropol.co.nz/economic-turn-dont-pull-the-handbrake/
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