By Glenn Fan-Robertson
The October BDO Business Performance Index Report shows a national business environment under pressure. Confidence has slipped to a record low, margins are tight, and leaders remain cautious about the months ahead. Locally, we are seeing a mix of optimism and strain. The report provides context for this tension and outlines ways businesses can navigate a challenging time.
National sentiment: A cautious outlook
More than 530 business leaders were surveyed, with data captured in September 2025. Only 48 percent feel positive about recent business performance, the lowest since the Index began in 2022. Just 35 percent feel positive about their financial performance in the past two weeks. Looking into 2026, only 56 percent expect to feel more confident.
The pressures behind these numbers are varied. Cash flow constraints, financial performance, political uncertainty, and wider economic conditions continue to influence sentiment. GDP fell 0.9 percent in the June 2025 quarter and CPI rose 3 percent in the year to September. With uncertainty in global policy, many businesses are hunkering down in 2025 while looking to “find a fix in 2026”.
What the results mean for Hawke’s Bay
The national findings align with what we are seeing here in Hawke’s Bay, although local context adds nuance.
Agribusiness remains the strongest sector. Seventy four percent of agriculture leaders report positive performance sentiment, supported by favourable returns, a softer New Zealand dollar, and lower interest rates. This is encouraging for Hawke’s Bay, though challenges remain, including weather volatility, supply chain weakness, insurance complexity, and inflation.
Tourism sentiment is softer. Confidence sits around 40 percent, which is a concern for a region reliant on visitor activity. Local operators are feeling the effects of lower discretionary spending, wage inflation, and rising operating costs.
Construction and property also show subdued confidence. Nationally, only 49 percent of construction leaders are positive about recent performance, with even fewer optimistic about the coming months. In Hawke’s Bay, recovery work after Cyclone Gabrielle has helped, but the future pipeline is thinner. Materials costs and labour shortages continue to squeeze margins.
Cash flow stress is pronounced in regional areas. Leaders across the North Island report the highest concerns. Seasonal businesses and contractors with smaller customer bases are particularly exposed to late payments and softer demand. Locally, many businesses are seeing debtor days increase and delaying investment as they focus on essential operating costs.
How Hawke’s Bay businesses can navigate the year ahead
Prioritise cash flow:
Review debtor processes, maintain visibility of tax obligations, manage stock carefully, and stress test cash flow. Keep communication open with your bank, especially if pressure is building.
Pipeline management:
Revive dormant leads and re-engage past prospects. Use CRM tools to reconnect with earlier contacts. If your pipeline is shrinking, revisit your market strategy.
Manage risk:
BDO’s Global Risk Landscape shows most businesses are risk-averse but few manage risk proactively. Understand your risk profile and build planning into your strategy.
Monitor leadership and team wellbeing:
Financial pressure impacts wellbeing. In owner-operated and family businesses, this impact can be greater. Prioritise conversations about stress and seek external support when needed.
The BPI Report shows businesses across New Zealand are operating through genuine challenge, and Hawke’s Bay is no exception. Yet the region’s strengths remain: agriculture is performing well, community support is strong, and OCR cuts are expected to support confidence and activity.
Experience shows that businesses that act early are best placed to thrive when conditions improve. At BDO we continue to stand alongside our clients and support them as they prepare for the next phase.
