Economy, AI, and exports dominate 2025 business outlook

Amid economic uncertainty, New Zealand businesses are turning to productivity, AI, and export opportunities to drive growth in 2025, according to a new business outlook survey.

Economic uncertainty has surged to the forefront of business concerns in New Zealand, according to Datacom’s 2025 Business Outlook Survey. A significant 77 percent of surveyed leaders in organisations with over 100 employees identified it as their biggest challenge for the year, a sharp rise from just 13 percent in 2024. However, the research also reveals optimism as businesses focus on productivity, growth, and leveraging technology.

Economic data released at the end of 2024 indicated that New Zealand entered a recession in the third quarter of 2024, with GDP contracting by 1.0 percent. This downturn, the largest since 1991 excluding the pandemic period, has heightened concerns about the economic outlook.

International factors such as potential trade tensions and global economic slowdowns are also contributing to the economic uncertainty.

Justin Gray, Managing Director of Datacom New Zealand, however, highlights the resilience of local businesses despite prolonged economic challenges.

“The past two years have tested businesses, but the momentum for recovery in 2025 is encouraging,” he says.

Productivity (29 percent) and growth (28 percent) have become the top priorities for businesses, marking a shift from last year when staff retention was a key concern.

Emerging technologies, particularly generative AI and automation, are seen as critical enablers for achieving these priorities. A substantial 68 percent of businesses plan to increase technology investments, with AI (46 percent) and automation (41 percent) topping the list of opportunities. Datacom’s data also shows AI adoption surged from 48 percent in 2023 to 66 percent in 2024, with 80% of users reporting positive impacts.

Gray says that the transformative potential of AI for businesses is huge.

“With proper investment and governance, tools like generative AI can drive efficiency and innovation. Our Enterprise AI Assistant, for example, helps businesses securely leverage their own data.”

However, budget constraints (34 percent) and skills shortages (15 percent) remain barriers to adoption.

This aligns with global trends. For instance, PwC’s Global AI Study indicates that AI could contribute up to $15.7 trillion to the global economy by 2030, with SMEs playing a pivotal role in harnessing its potential.

Cybersecurity remains a pressing issue, with over one-third of businesses reporting significant attacks in the past year, rising to 53 percent for larger organisations. Datacom stresses the importance of robust strategies to address this escalating risk.

Meanwhile, exports have emerged as a crucial focus for growth. Nearly half (49 percent) of respondents called on the Government to prioritise export opportunities, reflecting a shift in strategy. This is underscored by the recent TIN200 report, which revealed a 7.7 percent revenue increase for tech exporters, reaching $17.95 billion despite global challenges.

Businesses also evaluated Government performance, with larger organisations (200+ employees) rating its support more favourably (65 percent) than their smaller counterparts (49 percent). Boosting the economy remains the top priority for 87 percent of respondents, followed by export opportunities.

The 2025 Datacom Business Outlook Survey paints a complex picture of challenges and opportunities. While economic uncertainty looms large, the commitment to innovation, productivity, and global engagement signals a promising path forward for New Zealand businesses.

For businesses, leveraging tools like AI and automation while addressing skills and budget gaps will be vital. Exporting, once peripheral, is now a central growth strategy. As Gray concludes, “With the right investments, 2025 could be a turning point for long-term success.”