Business confidence in New Zealand’s largest city has taken a sharp downturn, with growing concern over energy prices, inflation and geopolitical instability weighing heavily on Auckland businesses.
The latest Auckland Business Chamber Business Confidence Survey shows negative sentiment has more than doubled since February, when confidence reached its strongest level since 2022.
The May 2026 survey found 54 percent of businesses now rate overall confidence as negative or very negative, compared with 25 percent three months earlier. Meanwhile, the proportion of businesses expecting the economy to decline has more than tripled, rising from 7 percent in February to 24 percent in May.
Auckland Business Chamber Chief Executive Simon Bridges says the shift is largely the result of international events rather than domestic economic conditions.
The survey period followed the outbreak of conflict involving Iran at the end of February, an event that has triggered global concerns around oil supply, fuel costs and economic uncertainty.
Energy costs have emerged as one of the biggest pressures facing businesses. The number of respondents describing energy expenses as unaffordable jumped from 40 percent in February to 55 percent in May, representing the largest movement recorded across the survey.
With New Zealand heavily reliant on imported fuel, local businesses remain vulnerable to fluctuations in global oil markets and disruptions to international supply chains.
Geopolitical concerns have also risen dramatically. In February, only a quarter of businesses listed international trade and geopolitical issues among their top concerns. By May, that figure had climbed to 45 percent.
Inflation and interest rate concerns have followed a similar trend, increasing from 44 percent to 55 percent over the same period. Businesses that had previously felt inflationary pressures were beginning to ease are now facing renewed uncertainty.
Consumer confidence remains the biggest challenge identified in the survey. Sixty-two percent of businesses cited weak consumer demand as their primary concern, up from 55 percent in February.
The findings suggest many households remain cautious with spending, creating additional pressure for businesses already navigating higher operating costs. Nearly half of respondents reported increasing numbers of customers struggling to pay invoices on time.
Despite the deterioration in overall confidence, there are signs that businesses have not completely abandoned hopes of recovery.
Half of those surveyed still intend to invest in their businesses over the next year, only slightly down from 54 percent in February. Similarly, 43 percent expect revenue growth over the next 12 months, compared with 55 percent previously.
However, hiring intentions continue to weaken. The proportion of businesses planning to recruit new staff has fallen from 41 percent to 36 percent, raising concerns about future labour market conditions if the trend continues.
Businesses responding to the survey identified fuel costs, inflation and consumer confidence as key areas requiring government attention.
Many are calling for stable economic management, reduced cost pressures and policies that support business confidence during a period of global uncertainty.
Since the survey closed on 10 June, a peace agreement ending the conflict between the United States and Iran was announced on 14 June. That development may help ease some of the uncertainty reflected in the survey results, although the longer-term impact on energy prices and business confidence remains unclear.
For now, Auckland businesses appear to be preparing for a more challenging economic environment while hoping global conditions stabilise and recovery momentum can return.
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