Leading concerns for business leaders revealed ahead of Budget 2025 in major sector survey
Leading concerns for business leaders revealed ahead of Budget 2025 in major sector survey
In the lead-up to the Government’s annual Budget unveiling on 22 May, accounting firm BDO has released biannual findings of the latest BDO Business Wellbeing Index, highlighting the leading issues for more than 730 business leaders nationwide.
The May 2025 report of the BDO Index (surveyed during April), reveals that business growth has emerged as a top five concern for business leaders for the first time since the survey was launched in 2022.
“We’re seeing business growth increasingly feature as a top-of-mind issue for business leaders as they look to move forward from the ‘survival mode’ of the past 18-24 months. Changing market conditions, fuelled by factors such as lower interest rates and improving dairy prices, are driving an improvement in overall business performance sentiment. However, for many business leaders, achieving business growth remains challenging in the current economic environment, with global trade dynamics highly uncertain, and their eyes will be on how the Government might offer support in the upcoming Budget and future policies.” - Kimberley Symon, BDO Advisory Partner.
Overall business performance sentiment among business leaders has improved, returning near to 2023 levels after the record lows during both 2024 BDO Index surveys (April and September). 57% have felt positive about overall business performance in the past 2 weeks, and 66% expect to feel positive in six months’ time. This compares to a low point of 51% feeling positive about overall business performance in September 2024.
However, while the latest results show an overall improvement in sentiment, leaders are still feeling less positive than they were during the post-election period of October 2023.
Business growth now a key issue for New Zealand business leaders
The BDO Index reveals the five business performance issues which business leaders currently feel least positive about are economic factors, political factors, business growth, workload and cash flow. These are similar pressures to our September 2024 survey, with the addition of business growth as a new priority issue.
Just 42% of New Zealand business leaders nationwide felt positive about their business growth in the past two weeks. At a sector level, this compares with 27% in the hard-hit construction sector and 38% in the more buoyant agriculture industry.
Growth may have fallen by the wayside in recent years as many business leaders have focused on the day-to-day challenges of maintaining financial sustainability during trying market conditions. Now, with more encouraging economic signals and improved financial sentiment for many sectors, business growth is returning to the agenda for business leaders – but many are likely still finding this challenging in the current economic environment.
Agribusiness leads the way on positivity
As well as commentary on the New Zealand business sector as a whole, the May 2025 report of the BDO Business Wellbeing Index features sector-specific insights across agribusiness, construction, Māori business, not-for-profit, tourism and retail.
The May report shows agribusiness leaders are more positive about their business performance than ever. 79% of business leaders have felt positive (all or most of the time) in the past two weeks, a significant jump from 56% in the previous measure (September 2024). Higher commodity prices for dairy are likely a major contributor to this improvement.
Meanwhile, retail, tourism and Māori business leaders are also feeling more positive about business performance than in September 2024, perhaps buoyed by the decline in inflation and interest rates. More concerningly, construction business leaders have reported their lowest levels of positivity in business performance since the first BDO Business Wellbeing Index survey in May 2022. The upcoming 2025 BDO Construction Sector Report will reveal more about the leading issues and concerns for these business leaders.
All eyes on the Budget for a business boost
While the BDO Index shows business leaders are generally feeling more positive about business performance than they were in September last year, there are some clear areas of concern. Just 41% are feeling positive about economic and political factors.
With the Government Budget set to be released on 22 May, business leaders will be watching closely to see what levers the Government pulls to address the concerns they’re facing. With the smallest operating allowance in a decade, this may not be a big-spending Budget. Instead, the Government may look at low-cost measures they can make to alleviate business pressures, such as encouraging foreign investment, reviewing immigration policy and reducing compliance red tape. However, interestingly, the BDO Index shows compliance and regulatory issues are not priority concerns for New Zealand business leaders, so the business impact of any regulatory changes is uncertain.
“Our May report for the BDO Business Wellbeing Index reveals that while business leaders are generally feeling more positive than in September 2024, they remain troubled by economic and political factors, business growth, cash flow and workload. There may be hope that the upcoming Budget will include measures to help alleviate some of these pressures. However, with Finance Minister Nicola Willis signaling in her pre-Budget speech that there will be ‘no lolly scramble’, it will be important for business leaders to maintain focus on the controllable elements in their business strategies – considering all aspects impacting their operating margins.” – Kimberley Symon, BDO Advisory Partner.
Future sentiment more positive, but concern for new technologies and artificial intelligence
As evidenced in previous reports, business leaders are typically more optimistic about their future business performance than their current outlook. While the BDO Business Wellbeing Index shows 57% of respondents have felt positive about their current overall business performance, 66% expect to feel positive in six months’ time.
Looking at the expected issues for business leaders in six months’ time, the pressures remain similar to the current outlook, except for AI. Only 50% of business leaders expect to feel positive about their ability to leverage and adapt to new technologies (including AI), making it one of the top five future issues for business leaders.
BDO New Zealand will provide analysis from 2:00pm on Thursday 22 May on what the Budget means for business leaders and owners.
Related resources:
- View the May 2025 BDO Business Wellbeing Index report here.
- Download digital photos of Kimberley Symon, BDO Advisory Partner and Alan Scott, BDO Tax Partner.
More about the report
BDO’s seventh edition of the biannual BDO Business Wellbeing Index is based on survey responses from a nationally representative sample of over 730 local business leaders during April 2025. Launched in June 2022, the BDO Business Wellbeing Index is a unique twice-yearly study exploring the leading business issues on the minds of New Zealand business leaders – analysing factors impacting both their business performance and wellbeing, then sharing practical business tips to help navigate these. The report explores business leader sentiment, including their current and future outlook (in six months’ time) across a comprehensive list of business attributes. A video interview with a panel of BDO experts and leading market commentators also features.