NZ business optimism hits six-year high, 2degrees survey finds

Businesses are bullish on growth, productivity and tech-driven transformation despite cost pressures.

New Zealand business leaders are entering the second half of 2025 with renewed confidence, according to new research from 2degrees, which reveals the highest levels of business optimism since the telco began its annual Shaping Business Study in 2021.

Released yesterday, the 2025 edition of the survey shows that 45 percent of business decision-makers feel more optimistic about their prospects compared to last year, a significant jump from 34 percent in 2024. The study, conducted by research agency Matter, captured insights from more than 500 business leaders across Aotearoa between April and May 2025.

“We haven’t seen optimism this high in years, with business owners seeing opportunities to grow and introduce new products and services,” says Andrew Fairgray, Chief Business Officer at 2degrees.

Driving this sentiment is a combination of business growth (45 percent), customer demand (40 percent) and improvements to products, services and sites (38 percent). Larger businesses (those with more than 51 employees) are particularly buoyant, with 72 percent reporting a positive outlook for the year ahead.

This confidence is translating into action. Nearly two-thirds (65 percent) of those surveyed expect revenue to increase in the next 12 months, up from 53 percent last year. Furthermore, one in five businesses (19 percent) now describe themselves as “thriving”, a marked increase from 14 percent in 2022.

“Optimism isn’t passive,” says Fairgray. “Businesses are backing up their outlook with investment, innovation, and a focus on growth.”

Over half of businesses (52 percent) plan to increase investment this year, the highest figure recorded since the survey’s inception. Among those that are optimistic, 69 percent also reported launching a new product or service recently.

One of the standout findings is the rising role of artificial intelligence (AI) and automation in boosting productivity. According to the survey, 46 percent of businesses say they’re more productive now than in 2024, and one in four directly attribute this to the adoption of AI technologies.

“AI has moved from buzzword to business driver,” says Fairgray. “We’re seeing a clear trend: businesses are backing technology as the path to sharper performance.”

Nearly 60 percent of all businesses now see AI as a key productivity tool, with that number soaring to 90 percent among larger firms, and 99 percent in high-tech sectors such as media and telecommunications.

Rather than increasing headcount, business leaders are turning to smarter tools to get ahead. When asked what would help their businesses thrive, only 19 percent said they needed more staff, compared to 44 percent who pointed to better cashflow and 27 percent who cited improved technology.

“It’s not just about doing more with less,” adds Fairgray. “It’s about doing more with better tools and building a workforce that’s equipped, engaged, and enabled.”

But it’s not all good news.

Despite the upbeat outlook, rising costs remain a persistent thorn. Around 80 percent of businesses have seen operating costs increase over the past year, often at a higher rate than in 2024. In response, half of all businesses plan to raise their prices over the next 12 months.

“Businesses continue to grapple with higher input costs and cautious consumer spending,” says Fairgray. “But rather than hunkering down, many are choosing to adapt and find new ways to deliver value.”

While cybersecurity wasn’t the top concern, the report shows a notable shift in how businesses are approaching digital threats. Forty-two percent of businesses plan to increase cybersecurity spending in 2025, up from 33 percent the year before.

“Businesses aren’t just reacting to threats anymore, they’re proactively investing in tools that give them greater confidence and control,” says Fairgray.

Although only 16 percent of businesses say they are “very worried” about a breach (down from 24 percent in 2023), larger firms remain cautious, with 39 percent still expressing high concern.

The research also highlights what businesses need from government to thrive in the current climate. Top of the wish list: Tax incentives and breaks, followed by action on inflation and cost of living pressures. Better digital skills and improved access to technology also feature prominently.

As businesses look ahead, Fairgray says the findings offer a hopeful snapshot of a sector that’s finally regaining its momentum.

“With confidence on the rise, New Zealand businesses are entering 2025 ready to invest, innovate, and thrive.”