Taupō District Business Sentiment Report - April 2025

Summary

The April 2025 Taupō District Business Sentiment Survey highlights a stabilised and increasingly optimistic outlook among the local business community. Confidence has strengthened, with 60% of businesses describing themselves as confident, up from 42% in September 2024 and the highest level recorded to date. At the same time, the proportion of businesses reporting concern has fallen to just 21%, down from 29% in September 2024, signalling growing resilience and adjustment to current market conditions.

While optimism has improved, businesses remain aware of key challenges over the next six months. Cost pressures remain the most significant challenge, with consumer confidence and spending patterns, cost of living, and insurance costs identified as the top concerns for individual businesses. For the Taupō District, cost of living, consumer confidence and housing affordability emerged as the most pressing issues, impacting workforce attraction and community wellbeing. Skills shortages also continue to constrain growth, although general staffing levels remain steady, with 74% of businesses reporting they have the workforce needed to operate effectively.

Business performance indicators have shown positive movement. Revenue has improved for 48% of businesses, which is double the result recorded in September 2024, and profitability has strengthened, with 53% reporting improved performance. However, pressures on margins persist, with 31% experiencing profitability declines due to rising input and operational costs.

Outlook indicators reflect cautious optimism. Most businesses expect to maintain or modestly expand their operations over the next six months. Views on the national economy have stabilised, with fewer businesses perceiving an ongoing slowdown, while confidence in the Taupō District economy has lifted. Currently, 24% of businesses report experiencing local growth, and 35% anticipate further improvement in the months ahead.

Workforce sentiment remains generally positive, with 72% of businesses expecting staffing levels to hold steady and 19% planning to increase headcount in the next six months. However, specialist skill shortages and housing affordability in Taupō continue to be viewed as barriers to growth and talent attraction.

In conclusion, the April 2025 survey signals improving business sentiment and performance across the Taupō District. While cost pressures and workforce challenges remain, most businesses are focused on consolidation and measured growth, supported by signs of stabilisation at both the local and national levels.

Business Confidence

Business confidence across the Taupō District has strengthened notably. The proportion of businesses describing themselves as "Confident" rose from 42% in September 2024 to 60% in April 2025, reflecting growing stability and optimism. Businesses with a neutral or cautious stance declined from 29% to 19%, and the number reporting concern dropped to its lowest level at 21%. While challenges remain, the data suggests many businesses have adapted to current conditions and are increasingly focused on future opportunities.

Key Factors Impacting Businesses & the Taupō District

Businesses identified a range of factors likely to influence their operations and the Taupō District over the next six months. These reflect a mix of local, national and global pressures across four key themes.

1. Economic & Financial Pressures

Top 3 Factors - Own Business:

• Consumer Confidence & Spending Patterns (64%)

• Cost of Living (52%)

• Insurance Costs (45%)

Top 3 Factors - Taupō District:

• Cost of Living (76%)

• Consumer Confidence & Spending Patterns (67%)

• Energy & Electricity Prices (45%)

Analysis: Shifts in consumer behaviour remain front of mind for businesses, with spending patterns directly impacting performance, particularly in Taupō’s strong retail and service sectors. Cost of living pressures are strongly felt across both the business and district, influencing workforce stability and population growth. Rising energy and insurance costs are also challenges for businesses, where overhead pressures can erode margins. Inflation, fuel prices, wage costs and regulatory compliance round out the list, reflecting the range of ongoing cost pressures the businesses are navigating.

2. Workforce & Business Environment

Top 3 Factors - Own Business:

• Skills Shortages & Challenges Recruiting (41%)

• Declining Market (40%)

• Employee Retention & Turnover (34%)

Top 3 Factors - Taupō District:

• Skills Shortages & Challenges Recruiting (57%)

• Housing Affordability & Availability (57%)

• Employee Retention & Turnover (33%)

Analysis: Workforce-related challenges are a dominant theme for businesses and the district, with skills shortages and retention pressures leading. At a district level, housing affordability and availability are seen as a systemic barrier, highlighting the link between housing supply and Taupō’s ability to attract and retain skilled workers. Other notable concerns include mental health and wellbeing (17% for businesses, 22% Taupō District), highlighting growing awareness of employee welfare. Crime and education quality were rated lower for businesses but were raised at a district-level.

3. Supply Chain & Infrastructure

Top 3 Factors - Own Business:

• Material & Product Costs (41%)

• Transportation Services & Infrastructure (26%)

• Freight & Logistics Costs (26%)

Top 3 Factors - Taupō District:

• Health Services & Infrastructure (40%)

• Transportation Services & Infrastructure (34%)

• Water Services & Infrastructure (34%)

Analysis: Businesses highlighted rising input costs and logistical challenges, indicating ongoing pressure from global and national supply chain disruptions. At a district level, the attention shifts toward essential infrastructure, particularly health and water services, with concerns about regional capacity and service delivery to support a growing population. Transportation infrastructure appears in both perspectives, with concern about the region’s connectivity and ability to support business operations.

4. Regulatory & Environmental Factors

Top 3 Factors - Own Business:

• International Trade / Foreign Policy (38%)

• Land Use Policy Settings / RMA Reform (22%)

• Climate Change / Severe Weather Impacts (22%)

Top 3 Factors - Taupō District:

• Land Use Policy Settings / RMA Reform (52%)

• International Trade / Foreign Policy (33%)

• Social Development / Investment (33%)

Analysis: Businesses are focused on external risks like international trade and climate related issues, which can affect supply chains, demand and long-term planning. At the district level, regulatory issues lead, with land use and RMA reform seen as essential to unlocking housing, infrastructure, and investment opportunities. Social development and investment reflects district awareness of the importance of inclusive growth and community wellbeing.

Business Performance Insights

Revenue Performance

Revenue performance over the past six months has varied across sectors, reflecting a mix of market dynamics. The number of businesses reporting revenue growth doubled from 24% in September 2024 to 48% in April 2025, indicating many businesses have been able to capitalise on opportunities across the Summer peak period. However, 29% reported revenue declines, a decrease from previously but still highlights soft demand in certain markets, cost-conscious consumers, or disruptions that affected sales.

Profitability Performance

Business profitability has strengthened, closely aligned with revenue growth, with 53% of businesses reporting increased profitability - the highest level across the five survey periods. While this is a positive shift, profitability pressures have not disappeared with 31% of businesses reporting decreases and citing inflation and rising operating costs as key factors. These costs continue to erode margins for many, making it more difficult to sustain or grow profitability despite steady or improving revenues.

Profitability Outlook

Looking ahead, business sentiment around profitability is cautiously optimistic. While challenges remain, 43% of businesses expect profitability to remain consistent and 28% are forecasting improvement. This suggests a more measured outlook - businesses are recovering but are cautious about sustaining that momentum, due to potential headwinds including seasonality, cost pressures, and consumer demand volatility.

Business Demand

Current business demand for services and products provides further context to revenue and profitability trends. 37% of businesses reported an increase in demand, indicating improving market conditions and renewed customer activity. A further 40% are maintaining steady demand levels, which reinforces the sense of stability that has emerged. However, 23% of businesses are experiencing a decrease in demand, highlighting that softness remains in a range of business sectors.

Business Growth Expectations

Most Taupō District businesses anticipate stable conditions over the next six months, with 47% expecting to remain the same size. Businesses forecasting moderate growth has risen to 38%, signalling cautious optimism and a shift towards expansion. Plans for significant growth have eased, with only 3% expecting major expansion. This suggests businesses are favouring incremental growth strategies over bold moves as they navigate current market conditions. Notably, uncertainty has also increased slightly, with 9% unsure of their growth outlook. Overall, the data suggests a steady and considered approach to growth, with businesses balancing ambition with caution.

Business Views on the New Zealand Economy

Businesses' views on the current New Zealand economy are mixed. 48% of businesses view the NZ economy as "standing still," up from 26% in September 2024. Meanwhile, those who viewed it as "slowing down" have fallen to 31%, indicating concern about the ongoing decline has eased. Businesses seeing the economy "in growth" remains steady at 17%, holding at the highest level recorded across recent surveys. Collectively, these shifts suggest businesses view the national economy as having steadied.

Looking ahead, 33% of businesses expect improvement, down from 46% in September 2024, indicating some softening in optimism. Meanwhile, 29% now anticipate a deterioration, up from 20% previously, reflecting increased caution. A further 29% expect conditions to remain the same. Overall, while confidence has dipped, the majority still expect stable or improving conditions over the next 6 months. 

Business Views on the Taupō District Economy

Business views on the Taupō District economy are increasingly positive. 53% of businesses now describe the local economy as "standing still", indicating stability. This marks a shift away from perceptions of decline and points to a more settled environment. Supporting this, only 21% of businesses now believe the economy is "slowing down", and 24% see the Taupō economy as "in growth". These results reflect a positive sentiment shift, with fewer businesses experiencing deterioration and more seeing signs of resilience and growth.

Looking forward, businesses maintain a cautiously positive outlook for the Taupō District economy. 35% expect improvement over the next six months, while 40% expect conditions to remain the same. With 21% of businesses anticipating a decline, this shows that some uncertainty remains. Overall, the majority of businesses forecast stability or growth, suggesting confidence in Taupō’s ability to continue navigating national and global economic challenges effectively.

Staffing & Skills

The majority of businesses (74%) reported having the workforce to operate effectively. However, 26% are facing gaps, with 17% indicating specific skill shortages, 5% reporting general understaffing, and a further 3% noting other resourcing challenges. Highlighting that while staffing pressures have eased for many, not all businesses are fully resourced.

Among those facing challenges, difficulties in filling specialist and technical roles remain a key concern. Businesses reported recruitment into these roles is often complicated by factors such as competition for skilled candidates, limited local talent pools, and Taupō’s housing affordability and availability, which can limit the region’s attractiveness to new workers.

Looking ahead, 72% of businesses expect their staffing levels to remain steady, 19% plan to increase staffing, and only 9% anticipate decreases. Workforce pressures appear to have eased, but skill shortages remain a barrier to unlocking growth opportunities for businesses.

Business Outlook & Opportunities

Taupō businesses see growth opportunities emerging across tourism and housing infrastructure, and new sectors like energy, tech, and cultural tourism. Expanding premium visitor experiences, boosting shoulder season demand, and attracting more corporate and event-based visitors are seen as key priorities. Taupō District’s growing population also presents opportunities for service providers and businesses catering to new residents and remote workers. The business outlook is mixed; some operators report strong performance and forward bookings, while many remain concerned about cost pressures, workforce shortages, and slow recovery in parts of the economy. Overall, businesses are focused on stabilising, managing costs, and gradually growing. 

Business Advocacy & Representation

Businesses see local and central government as vital enablers of growth, but views on how well they are performing this role remain mixed. Many businesses value current partnerships and support channels, others expressed frustration at the lack of clear strategic direction and responsiveness to business needs. Key issues raised included tourism marketing, infrastructure investment, and the need for efficient regulation to reduce costs and complexity.

There is also a desire for stronger business advocacy and representation. While many businesses feel heard through local networks such as chambers and industry groups, others want more meaningful engagement and action on key issues. Suggestions included more frequent and diverse engagement channels (such as town halls, surveys and industry-specific forums) and stronger advocacy on issues like skills shortages, event attraction, and tourism leadership. Overall, businesses are seeking a more connected and coordinated approach between businesses, agencies, local and central government to drive Taupō forward.

Conclusion

Overall, the April 2025 Taupō District Business Sentiment Survey reflects a business community that is showing resilience and adapting to evolving conditions. Confidence and performance indicators have improved, and while businesses remain mindful of ongoing cost pressures, skills shortages and infrastructure challenges, the outlook is increasingly stable. As Taupō continues to grow and diversify, there is a clear focus on measured expansion, strengthening workforce capacity, and building on emerging opportunities across key sectors. Continued collaboration between businesses, local and central government, and industry groups will be essential to maintaining this positive momentum and ensuring the district remains a vibrant and sustainable place to do business.

Business Sentiment Response Overview