The pile of New Zealand companies being dragged through the courts toward formal closure is now growing fast enough that insolvency practitioners say the next six months will see more winding up applications than the whole of 2021 and 2022 put together. More than 400 applications have already been filed in the year to the end of April, and the people who do this work for a living think the curve has not yet rolled over.
Keaton Pronk, an insolvency practitioner at McDonald Vague, told RNZ that company failures are running at levels not seen for about fifteen years, approaching the shoulder years of 2008 and 2011 around the global financial crisis without yet matching the worst of that period. “We expect that, by June this year, there will be more winding-up applications in six months than what we saw in the 2021 and 2022 years,” he said. Applications usually settle in autumn before jumping in July and peaking in November, so anyone hoping the worst is over should treat the current pace as the start of the busy season rather than the end of it.
The annual figures already on the books make the warning easier to believe. According to MBIE data summarised by Human Resources Director, 2,867 companies entered liquidation in 2025, the largest annual total in fifteen years and the fourth biggest in the past quarter century. Another 50,485 companies were removed from the Companies Office register during the same year, the largest cull since 2013. New incorporations more than covered that, with 60,897 fresh registrations producing a net gain of about 10,412 companies on the books. The headline number of registered businesses is still rising, but the churn underneath it is the kind of pattern you would expect in a recessionary cycle rather than a steady one.
Sector data shows where the pressure is concentrated. Construction accounts for roughly 30 percent of liquidations, which is no surprise given that 95 percent of construction firms in New Zealand have five or fewer employees and almost no balance sheet to absorb a bad debtor or a stalled site. Hospitality, retail and transport follow close behind, and the same names keep appearing month after month in the formal notices in the New Zealand Gazette. The running list of winding up advertisements is updated constantly, and on most weekdays it adds a dozen or more new filings.
Retail in particular started the year with a thump. In the first ten days of 2026 alone, 61 shops announced closures or liquidation, with familiar mall tenants including EB Games, Miniso and Yoyoso among the casualties. That was before the latest leg of fuel-driven inflation set in after the Iran conflict, and before the wholesale electricity bills that have squeezed manufacturers and hospitality operators through the first quarter. RNZ’s earlier tally of those closures noted that landlords were already negotiating shorter leases and percentage rent deals just to keep frontages occupied.
The reasons being offered by practitioners are unglamorous and consistent. Kare Johnstone, a partner at McGrathNicol, put it plainly when she told Human Resources Director, “You combine that with the ongoing rising costs for insurance, rates, rent, and food over the last few years, and customers start to reduce spending.” Economist Shamubeel Eaqub described how the unwind tends to play out for individual operators. “A lot of businesses would have gone out and hired people or they might have made investments or they might have brought in stock so they’ll be at the edge,” he said. Once household discretionary spend pulls back, the firms that geared up during the post-Covid bounce find that the stock or the headcount is suddenly the thing that pushes them over the line.
The supporting macro picture is hardly reassuring. REINZ said yesterday that 6,262 residential properties sold in April, down 21.2 percent on March and down 7.9 percent on the same month a year earlier, with the national median sitting at $775,000. The Reserve Bank’s latest survey of expectations had businesses tipping inflation back up to 3.41 percent within twelve months, and Westpac chief economist Kelly Eckhold has been telling clients that GDP growth will slow to around 1.5 percent this year while unemployment drifts up to 5.6 percent. None of those numbers help a small operator trying to decide whether to keep trading through winter or get out while there is still something left for unsecured creditors.
One uncomfortable detail in the McDonald Vague analysis is the question every director faces once the cash is running short. Pronk noted that the legal test under the Companies Act 1993 is not just whether the owners can see a path back to viability, but whether continuing to trade would breach their duties to creditors. If the trouble is a one-off, recovery may be defensible. If the trouble is structural, the act effectively requires directors to stop before the hole gets deeper. In a year when costs are climbing across insurance, electricity, rates and freight, more directors are being told by their advisers that the honest answer is the second one.
The data point that should worry policymakers is not so much the 400-plus winding up applications already filed, but the seasonal shape Pronk described. If the busy months of July through November land on a base that is already running at fifteen year highs, the final 2026 tally will be ugly. The new business register will keep growing because optimism in this country has always run ahead of profit, but the firms quietly disappearing from the bottom of the list employed real people and signed real leases. Each filing in the Gazette is a small reminder that the cost of living crisis is not only a household story.
What are you seeing in your own town or sector β closures, empty shopfronts, suppliers tightening payment terms? Tell us in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job π
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