As we move through 2025, New Zealand’s economic and business environment is being tested on multiple fronts. A high interest rate regime, lingering geopolitical tensions, and cautious global markets are creating a challenging backdrop for business owners, investors, and buyers alike.

But while conditions are tight, opportunities remain, especially for well-prepared businesses with a clear story to tell.

Interest Rates and Economic Sentiment

Despite signs of inflation easing, interest rates remain elevated and are likely to stay higher for longer. The Reserve Bank of New Zealand continues to take a cautious stance, mindful of global volatility and domestic inflation resilience. For businesses, this means debt remains expensive and confidence subdued.

Consumer demand has plateaued, housing activity remains sluggish, and many sectors are feeling the squeeze from margin compression. Growth isn’t out of reach, but it’s certainly harder won.

Australia’s Role and the Regional Picture

Australia’s economy, while slightly more buoyant, is also grappling with tight monetary policy and cautious consumer sentiment. As our closest trading partner, Australia’s fortunes matter. A softer China and ongoing supply chain normalisation are shared challenges.

On both sides of the Tasman, wage inflation and cost pressures continue to eat into earnings, even as top-line revenue stabilises. The days of easy pricing power are behind us.

Global Pressures and Investor Caution

On the global stage, investor sentiment remains cautious. War in Ukraine, instability in the Middle East, and ongoing US-China tensions continue to dominate headlines and investment risk models.

Cross-border M&A is still occurring, but the bar is higher. Buyers are more selective, due diligence is deeper, and risk-adjusted valuations are driving deal terms. In this environment, clarity and credibility in your numbers, and your narrative, matter more than ever.

What It Means for Business Owners

If you’re considering a sale, capital raise, or strategic partnership, the market hasn’t disappeared, but it has changed.

Buyers are still there. They’re just more focused. They’re looking for:

  • Margin stability and cost control

  • Realistic, defensible growth plans

  • Strong leadership and governance

  • Clear evidence of resilience and adaptability

Businesses that meet these criteria are still attracting strong interest and commanding healthy multiples. Those that don’t may struggle to get noticed.

Our View

At Three Sixty Capital Partners, we’re seeing a consistent theme: it’s no longer about running a broad, speculative process, it’s about targeted, well-prepared engagement with the right strategic or financial buyer.

We’re advising clients to:

  • Get ahead of due diligence

  • Ensure financials and forecasts are clean and credible

  • Tell a compelling, risk-aware story that speaks to today’s market

If you’re planning a move in the next 6–18 months, now is the time to get ready. Waiting for conditions to “go back to normal” may not be a strategy—because this may be the new normal.

Need guidance?

We work closely with founders, owners, and boards to position businesses for strategic outcomes, even in uncertain markets. If you’d like a confidential view on where your business sits—and how buyers might view it—get in touch.

Contact us to start the conversation.