Business liquidations in New Zealand have reached a 10-year high, with 2,500 companies shutting down in 2024, the highest annual figure since 2014.
This sharp increase of nearly 700 liquidations compared to 2023 underscores the severe economic challenges facing various sectors, particularly construction and retail.
Moreover, the number of companies entering receivership rose to 186, an increase of 84 from the prior year, reaching the highest level since 2012.
“We’ve spoken to a number of retailers over the Christmas break, and a number of them have said it’s been the toughest year ever that they’ve had, and they’ve been working retail 20, 25, or 30 years,” Retail NZ chief executive Carolyn Young said.
Young emphasised the resilience and determination of businesses, stating that “businesses don’t want to close, and they don’t want to go into liquidation, so they are doing everything they can to stay relevant, and to stay available, and to be open.”
The hospitality sector has also been significantly impacted by economic challenges, as evidenced by the latest liquidation data.
Steve Armitage, chief executive of Hospitality New Zealand, has expressed optimism for the summer season, which he believes is critical for hospitality operators aiming to recover from challenging economic conditions. The sector has also been eagerly anticipating a boost from increased international visitors.
Looking ahead, Retail NZ’s Carolyn Young remains cautiously optimistic about potential recovery. She believes that economic cycles will eventually favour retailers again but stresses the importance of navigating through these difficult times effectively.
“We do know that the good times will come back.”