New Zealand businesses are still failing at a pace not seen for more than a decade, with the latest insolvency figures showing the clean-out of struggling firms has carried well into 2026 rather than easing as many owners had hoped.
Credit bureau Centrix recorded 286 company liquidations in March, the worst March in 11 years and the highest tally for that month since 2015, RNZ reported. Around 3,023 companies were placed into liquidation in the year to March. That sits just above the 15-year high reached in 2025, when 2,867 firms went under, the most since 2010 in the wake of the global financial crisis, according to interest.co.nz.
The picture is of an economy where the rebound many operators banked on after the pandemic has been slower and shallower than expected. Keaton Pronk, an insolvency practitioner at McDonald Vague, told RNZ that March had been “the busiest in the past 10-15 years for winding up applications and corporate insolvency appointments”.
Construction remains the hardest hit part of the economy. Centrix data showed 768 building and construction firms were liquidated in the year to March, more than any other sector and equal to roughly 0.9 percent of all registered companies in the trade. Hospitality was close behind with 399 liquidations, up 49 percent on the previous year and the equivalent of about 1.3 percent of firms in the sector. Other services, which takes in everything from hairdressers to repair shops, recorded 174 liquidations, up 40 percent, while automotive repair and maintenance jumped to 74 from 27 a year earlier.
Centrix managing director Keith McLaughlin has framed the wave of failures as the economy working through a backlog rather than a fresh crisis, describing it as “a tidy-up from the historical past” and noting that arrears in the business sector were actually falling. He has also pointed to households reining in spending, telling RNZ there was “softer demand for credit, particularly in the discretionary spending areas”. That caution at the till feeds straight through to the cafes, restaurants and shops that depend on it.
Economist Shamubeel Eaqub has argued that many of the firms now folding overextended themselves in the hope of a stronger recovery. “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 in comments reported by Human Resources Director. When the upturn failed to arrive on schedule, the staff, stock and leases they had committed to became a millstone.
Rising fixed costs have compounded the problem. Kare Johnstone, chairwoman of insolvency and advisory firm McGrathNicol, said the squeeze had been building for years. “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,” she said. Inland Revenue has been another significant driver, ramping up efforts to claw back unpaid tax debt that built up during the Covid years and pushing some marginal firms over the edge.
Retail has felt the strain in the most visible way. In a span of roughly 10 days in January, about 61 stores announced they would close, including national chains such as EB Games, Miniso and Yoyoso alongside long-standing independents. The retail sector recorded a 34 percent rise in liquidations over the year, while transport operators saw a 27 percent increase as fuel costs and thin margins took their toll.
Not every corner of the economy is under the same pressure. Agriculture stood out as the most resilient sector in the Centrix data, with liquidations down 11 percent year on year, helped by stronger credit demand and improving farm balance sheets on the back of firm dairy and meat prices. Manufacturing also edged down about 5 percent, a tentative sign that some exporters are steadying.
The churn is not all bad news either. Even as firms collapse, new ones keep being created. Companies Office figures show 60,897 new companies were incorporated over the latest year, leaving a net increase of more than 10,000 registered companies despite the record removals. New Zealanders, it seems, are still willing to back themselves in business even in a tough market.
Commerce Minister Scott Simpson has pointed to wider sentiment improving, saying business confidence is at its highest level since 2014 and pinning hopes on regulatory reform to lift the load on small firms. Whether that optimism translates into fewer failures will depend on how quickly interest rates ease, how soon households start spending again, and whether the businesses still standing can hold on long enough to see the recovery they have been waiting for.
Have you had to close a business, or are you fighting to keep one open in this climate? We would like to hear what is working and what is not. Share your experience 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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