Will newfound business confidence hold firm in election year?

Previous election year cycles have revealed a general decline in business confidence as uncertainty increases in the lead up to the election and during any lengthy post-election coalition negotiations. The same "dents" in confidence have been seen in the franchising sector too, but an article published today on RNZ National featuring senior Westpac economist Michael Gordon, challenges the idea that lower confidence is matched with a similar decline in business activity in an election year.

In fact, says Michael Gordon, "Since 1990, [data shows] the economy performed slightly better in election years than those without one. The average gross domestic product (GDP) growth for election years was 3.1 percent, compared to a long-run average of 2.8 percent a year."

As always, the specific policies that each political party is bringing to the table will affect activity and the cost of doing business within the franchise sector, with areas such as immigration, taxation, minimum wage adjustments, and investment boost policies all proving influential in recent years.

We've included links (alphabetically) to each of the major party's policies below:

• Act
• Green
• Labour
• National
• New Zealand First

The RNZ article points out that a large array of different factors have a greater influence on the levels of business activity than the perceived uncertainties of the political environment, from the official cash rate, through labour market indicators and inflation expectations, to the (sort of) end of a global fuel crisis.

The article further quotes Westpac's Michael Gordon as saying, "We may see confidence rise or fall ahead of an election if businesses sense that a change of government is in the wind. But that doesn't mean there's a corresponding impact on activity, it just means that the [business confidence] surveys become a less reliable signal."

What are the numbers saying for second half 2026

The latest monthly ANZ Business Outlook, one of two major business confidence measures in New Zealand and released just last week, should provide a more reliable indicator as it will not yet be influenced by the upcoming election uncertainties. That has a net 37% of respondents reporting positive business confidence and increased 'expected own activity', with the responses from later in the month when fuel prices had started dropping, already exceeding 40% levels of confidence and own expected activity outlook. Profit expecations also rose amongst respondents, while cost and inflation expectations fell.

The Westpac Weekly Economic Commentary for 6 July also reported a very positive household wealth increase of 1.5% over the past year, with a noticeable shift in the makeup of household wealth, with the value of households’ financial assets up 3.3% over the past year and less reliant on the still soft value of housing and land assets - good news for franchisors as individuals look to be better placed to invest wealth in businesses.

Updates in July 2026

In figures just released today (July 15 2026), Westpac economists reported a very modest 0.4% half year gain in retail card spending (excluding fuel and auto). Business confidence, however, has been dented a little according to Westpac's analysis of the NZIER June quarter survey results, with the highly unpredictable situation in the Middle East still contributing to a lot of uncertainty amongst business owners. 

The newspapers seem to be full of alarmist headlines about restaurants heading out of business, although just 1.3% of all Accommodation & Food Services businesses in the country were liquidated in the last year. In June, the credit bureau Centrix released its latest credit indicator report data showing business credit defaults trending down 13% year-on-year, while across all categories, company closures were up 11% year-on-year. Accommodation & Food Services business liquidations year-on-year were higher than the average at 51% and Retail was up 35%, but seemingly still affected as much by previous years of Covid disruptions as any recent pain points related to the fuel crisis. 

The May Centrix report, providing similar data movements, said, "This divergence [between credit defaults and liquidations] highlights improving repayment behaviour among active companies, even as business closures continue to reflect the lagged impact of economic pressure."

It's worth noting also that Accommodation & Food Services is a category that is often broadly referenced as "hospitality", but actually includes restaurants, cafes, bars, pubs, taverns, clubs, caterers and takeaway shops, as well as hotels, motels and other short-term accommodation providers.