New Zealand recorded 772 business insolvencies in Q1 2026, down 17 percent from the end of last year but still 14 percent higher than the same quarter in 2025, with construction accounting for the most cases.
New Zealand business insolvencies may have peaked, but the easing in numbers should not be mistaken for a full recovery, according to an insolvency services firm. The pattern reflects broader economic pressures including elevated fuel costs linked to the Middle East crisis and the residual effect of rising interest rates through 2025.
BWA Insolvency's quarterly report recorded 772 insolvencies in the first quarter of 2026 — down 17 percent from the final three months of 2025, but 14 percent higher than the same quarter last year. Construction recorded the highest number of cases by volume, with 215 insolvencies in the quarter.
BWA principal Bryan Williams expected the economic impact of the Middle East crisis — which has pushed fuel and input costs higher for importers — to show up in the numbers later this year. "There is always a latency with regard to insolvent circumstances or formal states of insolvency," he said. "It's inevitable that will work its way through to a point where people will either be able to meet those incremental costs or not and they won't survive. But they'll be floating on reserves at this point."
Which sectors are most exposed
Food and beverage was among the sectors still under pressure, despite a quarterly improvement. Insolvencies in that sector fell 36 percent compared to the fourth quarter of 2025 but were still 31 percent higher than the first quarter of 2025. Construction insolvencies remained elevated by volume, reflecting the ongoing impact of rising material costs, skill shortages, and softer demand in the residential market.
Williams said consumer-facing sectors would find the next few months difficult. "The hardest hit will be those that rely on discretionary spending for incidentals, with that demand likely to drop significantly," he said.
A question of timing
Williams noted the economic shock driving recent insolvencies originated from external factors — specifically the Middle East crisis and its effect on import costs. When offshore conditions stabilise, he said, the relief would be felt quickly, though a full return to normality would take time as prices and supply chains rebalanced. The BWA Insolvency quarterly report was published on 27 May 2026.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.