The latest BWA Insolvency Quarterly Market Report offers a crucial lens on New Zealand’s business environment. The latest data as of Q1 2025 reveals a continued rise in insolvencies, underscoring challenges faced by various sectors amid global uncertainties.

Insolvencies in New Zealand have surged by 31% year-on-year, with Q1 2025 revealing a notable increase from Q1 2024. Liquidations have been the primary driver, experiencing a 40% jump, with receiverships and voluntary administrations dipping slightly.

Quarterly comparisons present a fragmented picture. Insolvencies have edged up by 6% from Q4 2024 to Q1 2025, with liquidations and receiverships incrementally rising, yet voluntary administrations continue to decline. Certain sectors continue to face pressure, with construction, food & beverage, manufacturing, and agriculture experiencing significant insolvency hikes.

The global climate plays a role, with international tensions and market uncertainties translating to dampened demand for New Zealand’s exports. This ripple effect impacts local businesses, particularly those with fragile balance sheets. The repercussion is clear: businesses must adapt and fortify their financial health in the face of these headwinds.

BWA Insolvency principal Bryan Williams, says that despite the data there is a path forward for those with strategic foresight.

“These numbers, while concerning, serve as a crucial alert for business owners to review their financial strategies.”

Williams says the rise is partially attributed to global economic factors, including trade instabilities and market uncertainties, but is also a carryover of COVID-19 and the accumulated debt that resulted.

“Insolvency is always late to the party. It has a long incubation period and often doesn’t show itself until the conditions that caused it have moved on.”

Williams believes that amid rising insolvency rates, companies should remain vigilant in looking for ways to minimise the impact of the current turbulence. “Hedge against the potential for risk wherever and whenever you can,” he says. “By identifying warning signs early, businesses can adapt and thrive despite the economic pressures.”