Mid-market optimism is finally showing up on the payroll

Mid-sized businesses have stopped just telling pollsters they feel better and started budgeting for it. A new MYOB-commissioned survey of more than 350 business leaders finds 51% expect the economy to improve over the next year, 48% lifted revenue over the past 12 months and 52% expect their own revenue to grow. The more telling figures sit further down. Some 34% intend to increase full-time headcount next year, 27% plan to add part-time or contract workers, and 55% intend to raise wages and salaries.

For a business audience, that is a more useful reading than another consumer confidence index. Households can feel gloomy at no cost. A firm that adds a salaried role is committing real money for years.

Optimism is cheap, payroll is not

The segment matters. MYOB estimates mid-sized firms employ more than 570,000 people, so intentions here flow straight into the labour market. MYOB executive general manager Paul Voges says these businesses “have continued to outperform expectations in consistently challenging conditions” and that growth plans “should translate into increased local investment… in the people, tools, and product and service development”.

MYOB sells accounting software to exactly this market, so its commentary has an obvious commercial tilt. But the structural point holds. Back in 2024, MYOB’s Anna-Louise Hoffmann explained that these firms are “equipped with more financial capital and human resource” than small businesses and therefore adapt faster. They tend to move first, and they can afford to.

The 2024 false dawn

There is a reason to weigh hiring over headline optimism. In October 2024, MYOB found 79% of mid-market leaders expecting the economy to improve, a three-year high, with then-executive general manager Kim Clarke declaring sentiment had “turned a corner”. The economy then shrank 0.9% in the June 2025 quarter, and the Herald’s Mood of the Boardroom survey found CEOs more upbeat on revenue but with hiring plans still weak.

Today’s 51% is far less exuberant than 2024’s 79%. It is also more credible, because it now comes with payroll commitments attached.

Revenue is steady, hiring is what moved

The revenue story has not surged. In September 2025, a separate MYOB survey of 500-plus leaders found 46% reporting revenue up and 51% expecting growth. The samples differ, so the comparison is indicative rather than exact, but 48% and 52% thirteen months later looks like consolidation rather than a boom.

What changed is willingness to hire on the back of it. Firms that a year ago told the Herald they were holding headcount flat are now planning to add it. That shift from defensive to expansionary usually comes before households notice anything, which is exactly why it matters. Fixed costs had already stopped crushing margins by late 2025, when Westpac’s regional survey noted margin-squeeze complaints had become “much less prevalent” despite rising rates and insurance bills.

Pay rises without a wage spiral

Employers worried that 55% planning pay rises signals a bidding war can relax, at least for now. The Reserve Bank’s Business Expectations Survey puts expected wage growth at 2.82% one year out and 3.02% two years out, with CPI expectations of 2.99% easing towards 2.5% over longer horizons. Businesses also expect unemployment to drift down from 5.22% to 4.89% over two years. That is a labour market firming gradually, not snapping tight.

The practical read is that good staff will cost a bit more in 2027, and firms that wait until the recovery is obvious will be hiring against everyone else.

A quarter still expect pain

This is not a uniform upswing. Some 27% of mid-sized firms expect the economy to decline and 20% expect their own revenue to fall. The risks that dominated in 2025 were largely external, with 44% citing international banking stability and 43% shipping and financial costs as top concerns. Those have not gone away, and exporters and importers in this segment remain exposed to them.

What to watch next

The macro forecasts back the cautious case. In December 2025, BusinessNZ projected GDP growth of “just under 3% per annum” through to 2027 after a stretch of negative per-capita growth. If mid-sized firms follow through on their hiring and wage plans, that is the mechanism that turns business confidence into household income, and eventually into the consumer mood that still lags behind.

The test is simple. Watch the job ads and the wage bills over the next two quarters. If they move, the recovery is real, whatever the next consumer survey says.

Sources

• RNZ: Half of mid-sized firms expect economy to improve – survey (2026-10-29)
• RNZ: Mid-sized businesses report return in customer demand (2024-10-23)
• MYOB: Economic confidence at three-year high amongst mid-market businesses (2024-10-23)
• NZ Herald: CEOs more upbeat on revenue and profit but hiring plans stay weak – Mood of the Boardroom (2025-09-23)
• MYOB: Agile mid-sized businesses hold their ground despite headwinds (2025-09-23)
• NZ Herald: Economy shows early signs of lifting, Westpac survey of households, businesses shows (2025-10-14)
• NZ Herald: Survey shows resilience, mid-sized businesses plan for growth despite challenges (2025-09-22)
• BusinessNZ: NZ Economy: Improving Outlook – Planning Forecast December 2025 (2025-12)