Number of Businesses

IBISWorld forecasts the number of businesses to increase by 1.8% during 2024-25, to total 620,370 businesses. Inflation in New Zealand continues to be elevated above the Reserve Bank of New Zealand’s (Te Putea Matua) 1-3% target range. Inflation tends to drive growth in the number of businesses, as it results in more businesses reaching the $30,000 turnover inclusion threshold. In the later stages of 2024-25, the cash rate is expected to drop, based on RBNZ’s expectations that inflation will be inside the target range. Cuts in the cash rate will promote greater household consumption expenditure. New business opportunities are likely to arise, with greater spending throughout the economy presenting opportunities for entrepreneurs to capitalise.

Several other factors influence the number of businesses in New Zealand, including the GDP and population growth. Short-term shocks to the economy, including interest rate variation and volatility in business confidence and consumer sentiment, can overwhelm these long-term growth factors. The number of businesses generally exhibits low volatility, as the exclusion threshold of $30,000 annual turnover minimises volatility from unsuccessful business ventures.