Insolvency rate high but slowing

Construction was the sector with the highest number of insolvencies in 2025. Still, new data shows the rate of new insolvencies is slowing, suggesting the worst pressures may be easing for the industry.

BWA Insolvency’s Quarterly Market Report recorded 3,132 liquidations, receiverships, and voluntary administrations across the country in 2025; the highest since the Global Financial Crisis and up 11.3% from 2024.

Construction topped the list, reflecting years of tight margins, stalled projects, and legacy debt from high interest rates and material costs.

However, the sector’s insolvency growth slowed to 9.3% year-on-year by late 2025—well below the sharp rises seen earlier. This aligns with broader recovery signals: Stats NZ reports 36,944 new home consents to January 2026, up 9.3%, while concrete production posted its first gain in three years.

“By the time a business enters liquidation, the conditions that caused its distress are already in the past. The improvements we are seeing now in interest rates, building activity and export returns arrive too late for those already in deep financial trouble,” BWA Insolvency principal Bryan Williams says.

“These closures reflect the challenges of recent years, not the conditions we are moving into. Their only connection to today’s economy is that they continue operating within it, without the financial strength to survive.”

Williams warned that directors of distressed companies should not rely solely on improving economic sentiment when planning their next steps.

“It is natural to hope that better times will solve current problems but continuing to fight a battle that cannot be won without new capital is exhausting and often futile.

“Directors should be decisive and seek early advice. Restructuring options are available that can preserve value, protect jobs and provide a more orderly way forward.”

While improving building activity and easing interest rates are positive signs, the recovery is expected to be painstakingly gradual.