Global uncertainty continues to pose a risk for New Zealand businesses, even as new data suggests insolvency levels may have peaked.
In its latest quarterly market report, BWA Insolvency revealed that 772 insolvencies were recorded in the first quarter of 2026, a 17% drop from the 936 cases reported in the previous quarter.
Insolvencies are still 13.9% higher than in the same quarter of 2025, underscoring continued financial pressure on many businesses.
“The current geopolitical situation continues to affect the market,” BWA Insolvency principal Bryan Williams said. He emphasised that the improvement in quarterly figures should not be taken as a sign of a full recovery.
“However, this is an external shock, not a homegrown economic failure. When offshore conditions stabilise, the relief here will be felt quickly, although a full return to normality will take time as prices and supply rebalance.”
Williams said global conditions are driving ongoing uncertainty for businesses.
“Elevated input costs, heightened supply-side risk, and persistent caution around spending continue to cause consumer confidence to fall and demand to drop off.”
Several consumer-facing sectors saw notable declines over the quarter.
Food and beverage insolvencies dropped 36% in the first quarter of the year to 94 cases, down from 145 in the previous quarter. However, insolvencies in the sector remain 31% higher than in the same period last year.
Meanwhile, retail trade insolvencies fell from 95 in the fourth quarter of 2025 to 43 in the first quarter of this year.
Construction remained the sector with the highest number of insolvencies, recording 215 cases in the first quarter, up from 201 in the fourth quarter.
Williams said businesses reliant on consumer spending remain vulnerable in the months ahead.
“The onset of winter will amplify the consequences that flow from troubled countries. The hardest hit will be those that rely on discretionary spending for incidentals, with that demand likely to drop significantly.”
Williams said many companies are still operating with tight balance sheets following the Covid-19 pandemic. He said, “Many of those companies have accumulated an obligation to Inland Revenue, and it is only a matter of time before a demand gets satisfied or liquidation will result.”
Data from the Ministry of Business, Innovation and Employment shows 2,867 company liquidations were reported in New Zealand last year, the highest level in 15 years.
One factor behind the rise in liquidations has been the Inland Revenue Department increasing its debt enforcement activity over the past few years.