The Reserve Bank has dropped the Official Cash Rate again - from 2.5% to 2.25% and while the move was expected, we see this as the final cut in the current cycle.
The business environment has been cautious for some time, and many of you have felt that directly in cashflow pressure, softer demand, or a general hesitation to invest. While we don’t expect banks to follow with major rate drops this round (most made their moves after the previous cut), this easing from the RBNZ is still an encouraging signal.
It won’t be instant relief — but it is the start of some pressure coming off.
Over the next few months, we expect to see a slow but steady improvement in overall sentiment and lending capacity, especially as confidence begins to rebuild.
Borrowing & Investment Appetite
We expect businesses to become more open to investing again, hiring, equipment, new projects, but it won’t be a big jump just yet. There’s still some catch up to do - clearing IRD debt, rebuilding cash reserves, and stabilising margins. Think of the next 12–18 months as warming up for a stronger 2026.
The Kiwi Mindset Still Matters
At the heart of it, Kiwi businesses are entrepreneurial, innovative, and relentlessly hardworking. That combination doesn’t disappear in tough cycles, it’s usually what pulls us out of them. We’ve been talking about “green shoots” for a while, and this OCR movement is another sign that momentum is shifting. It’s small, but it’s forward!
What we’d encourage you to focus on right now
1. Get on top of cashflow (seriously)... Starting with margins:
- Review your pricing
- Do your back-costing
- Check your charge-out rates
- Make sure your direct costs reflect current market reality
If your core business isn’t making a profit before overheads - that’s a pricing or cost issue, not a market issue.
2. Deal with IRD debt now, not later
Ignoring it is the worst option. Set up an instalment plan through myIR, or talk to us - particularly with provisional tax discussions coming up. This is your moment to reset.
3. Intentionally plan for 2026
Ask yourself:
- If someone was looking in from the outside, what would they change?
- If I sold my business today, would I get top dollar?
Small changes compound. Set a short, focused list of improvements for the year.
4. Stop doing everything yourself
If you’re constantly stuck working in the business, you can’t steer it. What can you delegate or outsource? Play to your strengths. Critically analyse all the tasks you do you in your business. Do you really need to be doing the bookkeeping if this really isn’t your strength?
Our View on the Road Ahead
We can’t control the external pressures - but we can control how we prepare and respond. Our goal is for you to enter 2026 with clarity, confidence, and a plan that matches the lifestyle and freedom you’re working so hard for. And honestly - no one has a perfect crystal ball. It’s a blend of economic signals and pragmatic action.
So the real question then becomes:
What do you want next year to look like - and how can we help you shape it?