For New Zealand businesses, the question is no longer whether they’ll come through the cycle. Most already have. The question now is what the recovery looks like, and how quickly owners can pivot from defending their position to investing in the next phase of growth.
Recent Gross Domestic Product (GDP) and manufacturing data have lifted the mood. GDP rose 0.8 percent in the March 2026 quarter, following an upwardly revised 0.5 percent in December 2025, bringing annual growth to 1.5 percent. Earlier signs that the recovery was extending out of the regions and into the manufacturing sector also pointed to something more durable taking shape.
But the conflict in the Middle East has introduced fresh uncertainty – reshaping global trade flows, pushing import costs higher, and denting some of the confidence that had been building.
On the ground, that has translated into another round of cost pressure for businesses that had only just stabilised after a difficult few years. What owners are telling their bankers now is more nuanced than the headlines suggest.
For Greg Byrne, Kiwibank’s General Manager Commercial Banking North, the mood among customers can be summed up in two words: Cautious optimism. Byrne leads Kiwibank’s commercial banking team, working with businesses carrying debt from $1 million to $20 million.
“Business confidence was building prior to the conflict in the Middle East. Then things shifted,” Byrne says. “What we’re hearing now is that there are no excuses – businesses are continuing on the path they were on pre-Christmas. There is still optimism, but there’s no doubt operating costs have been materially impacted. It will take time to recover, and businesses are still managing pressure across cash, customers and costs.”
The three Cs characterising caution
That pressure is not evenly distributed. Some sectors are still absorbing the slowdown, while others are starting to show signs of readiness to move.
“The construction sector has been under significant pressure,” Byrne says, though he sees an upside emerging. “When confidence returns, there’s capacity in the system to ramp up quickly. Customers I’ve spoken to, even this week, have solid pipelines and are well positioned. It’s a good time to build – if you have the confidence.”
Elsewhere, the picture is less clear. “Hospitality is under real pressure, and retail is continuing to struggle.” With those dynamics in mind, Kiwibank made a deliberate decision about how to engage as conditions tightened. Rather than waiting for customers to reach out, the bank leaned in.
“We made a conscious call to get on the front foot and connect early,” Byrne says. “We wanted to understand what might be coming, and how we could support customers before issues emerged.”
What they found was more resilience than expected.
“Businesses have held up better than many anticipated. Cash flows have been relatively stable, and owners have been acting prudently.”
Even where pressure existed, fewer customers than expected were seeking relief.
“It’s completely understandable that some are taking a cautious approach,” Byrne says. “But where businesses are in a position to do so, we’d like to see more investment in growth to match the ambition we know is out there. We’re seeing that in pockets, and we’re working to help more customers lean into those opportunities.”
Greg Byrne is Kiwibank’s General Manager Commercial Banking North.
In the meantime, many are doubling down on fundamentals.
“We’re seeing a continued focus on cash, customers and costs as businesses work to stay resilient.”
Byrne’s view is not that customers are in survival mode. It’s that they are stabilising and preparing for what comes next.
“It’s about being disciplined – managing cash flow back to a position of strength, rebuilding, and then refocusing on growth.”
Kiwibank’s January research with Talbot Mills, surveying 800 business leaders*, reinforces that shift. Forty-five percent ranked the ability to move quickly and adapt as a top-three driver of growth, while 85 percent said their organisation’s values influence everyday decisions. Byrne says both are now showing up in conversations with customers, particularly as they reassess their banking relationships.
A defining period
Byrne’s own customer conversations bear that out.
“We’re knocking on doors across multiple industries and actively pursuing opportunities to fund,” Byrne says. “What we’re hearing from businesses is, ‘I haven’t heard from my bank in a year,’ or ‘they don’t seem as engaged as you at Kiwibank.’
“What matters to customers is having a bank that shows up – one that is present, accessible and genuinely interested in backing their growth.”
That approach is resonating with customers in practical ways.
“For many, the difference is responsiveness,” he says. “Working with Kiwibank can mean more timely conversations, greater clarity on credit appetite, and terms that reflect the realities of their business. That comes from taking the time to understand how they operate, what they’re trying to achieve, and where the pressure points are.”
A big part of that is Kiwibank’s regional, on-the-ground presence.
“Our bankers are out in market, spending time face-to-face with customers in their own environments,” Byrne says. “We’re not removed from the businesses we support – we’re alongside them, seeing first-hand how they run and where the opportunities and risks sit.”
In practice, that translates into more informed and timely decisions.
“It can be as simple as putting a credit officer in the car and going out to a customer site,” he says. “You’re talking through a business plan in context, not from behind a desk. That means we can quickly build a shared understanding and respond with greater confidence and speed.
“It’s a different approach to banking – one that challenges the status quo by combining local knowledge with first-hand insight. This context enables us to make decisions that reflect the ambitions of a customer’s business. For customers, that translates into more practical support and a stronger banking relationship.”
Byrne’s advice for the next six months is pragmatic and focused, with two clear priorities.
The first is operational.
“Focus on resilience. Stay calm and think clearly. Be ready to act assertively when your moment comes, because this is a defining period. Opportunities will emerge, and those who move early will be better placed to capture them.”
The second is more personal, and less often discussed in banking conversations.
“This environment has taken a toll on businesses, particularly owners and operators. Looking after the wellbeing of those individuals is critical right now. Because unless leaders have a clear head and a balanced perspective, they won’t make the right decisions at the right time.”
It’s a pragmatic point, but an important one. Strong decisions come from clear thinking – and in this environment, looking after wellbeing is critical to making those calls well.
Find more practical insights, tools and stories for New Zealand businesses at Kiwibank’s Thrive HQ.
*Research conducted by Kiwibank and Talbot Mills in January 2026. Sample size of 800 business leaders and decision makers.
