Risky business - NZIER Insight 127

Are New Zealand firms more reluctant to invest? This NZIER Insight examines whether businesses have become more hesitant to commit to major capital projects and whether that signals a broader shift in firm risk appetite. We explore how investment intentions, liquidity positions, borrowing costs, and credit conditions have influenced business investment behaviour in recent years. 

The findings point to a more cautious investment environment, with firms appearing to place greater value on flexibility and stronger balance sheets. This matters because business investment is central to capital renewal, technology adoption, productivity growth, and future living standards in New Zealand.

NZIER Insights are short notes designed to stimulate discussion on topical issues or to illustrate frameworks available for analysing economic problems. They are produced by NZIER as part of its self-funded Public Good Programme. The purpose of NZIER’s Public Good Programme is to inform debate and educate on important economic and policy issues facing Aotearoa New Zealand. More information on NZIER’s Public Good Programme can be found at https://www.nzier.org.nz/public-good.