Latest Insolvency Report Urges Kiwi Business Owners To Heed Early Warning Signs

Friday, 2 May 2025, 2:41 pm
Press Release: BWA Insolvency

Latest insolvency figures reveal a sharp rise in business failures, highlighting both challenges and opportunities for New Zealand business owners.

The BWA Insolvency Quarterly Market Report released today shows insolvency rates between January and March 2025 surged by 31% compared to the same period in the previous year. Liquidations rose by 40%, while receiverships and voluntary administrations saw a decline.

The report's author, BWA Insolvency principal Bryan Williams, says that despite the data there is a path forward for those with strategic foresight.

"These numbers, while concerning, serve as a crucial alert for business owners to review their financial strategies," Williams says.

Key Data

NZ Insolvencies Q1 2025 vs. Q1 2024 – Annual Comparison

• Liquidations: Up from 504 to 705 (40%)
• Receiverships: Down from 40 to 39 (-3%)
• Voluntary Administrations: Down from 25 to 4 (-84%)
• Total Insolvencies: Up from 569 to 748 (31%)

NZ Insolvencies Q1 2025 vs. Q4 2024 – Quarterly Comparison

• Liquidations: Up from 666 to 705 (5.86%)
• Receiverships: Up from 37 to 39 (5.41%)
• Voluntary Administrations: Down from 6 to 4 (-33.33%)
• Total Insolvencies: Up from 709 to 748 (5.5%)

Williams says the rise is partially attributed to global economic factors, including trade instabilities and market uncertainties, but is also a carryover of COVID-19 and the accumulated debt that resulted.

"Insolvency is always late to the party. It has a long incubation period and often doesn't show itself until the conditions that caused it have moved on."

Williams believes that amid rising insolvency rates, companies should remain vigilant in looking for ways to minimise the impact of the current turbulence. "Hedge against the potential for risk wherever and whenever you can,” he says. "By identifying warning signs early, businesses can adapt and thrive despite the economic pressures."

Industries hit hardest in the last quarter were tourism, transport and delivery, construction and manufacturing. The construction industry has seen continued high rates of business failures, with this quarter’s figures showing no reprieve—insolvencies increased by 44%, up from 130 in Q1 2024 to 187 in Q1 2025.

"Companies with solid balance sheets can expect to ride out the challenges immediately ahead. Focusing on efficiency and innovation will be the wet weather coat for these companies."

Acknowledging the impact of the current "arm wrestle" between the United States and China, Williams hopes both parties will soon recognise that fighting it out may cost more than it will gain.

"The best that can be hoped for is that leaders will pull back and let their respective societies grow as they will. The interplay of global tensions and local economic factors means New Zealand businesses must be agile and prepared. Our current insolvency figures are a reflection of these broader issues."

Looking ahead, Williams believes there are reasons to be optimistic: "Though the short-term outlook remains challenging, New Zealand's inherent resilience and adaptability are its greatest assets.

"Even one or two major projects within the country can dramatically shift business optimism, reinvigorating growth and opportunity," he says. "Such developments can serve as a catalyst for broader economic revival.

"There is a road of turbulence ahead and this will damage plans that were made during more stable times. The effects will be universal and avoiding them will be like a rally driver trying to avoid potholes.

“Businesses that stay nimble, focus on core strengths, and prepare for future opportunities will be well-positioned when stability returns."

The full Quarterly Market Report is available here.

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