'Surely it can't get any worse': Thousands start new businesses despite economic crunch
It has been a tough few years for the economy and several high-profile businesses have closed their doors but that isn't putting some people off starting up something new.
Despite an ongoing economic downturn, thousands of people in New Zealand are starting new businesses, according to recent statistics. Between July and September of the current year, 62,061 companies were incorporated, marking the highest number since 2021. Of these, 5,000 were in trustee services and residential property investment, while 1,891 were construction firms, 1,171 were business consultants, and over 1,000 were cleaning companies.
Noteworthy sectors included 889 computer software development companies, 612 restaurants, 601 clothing retail companies, and 462 takeaway food companies.
Auckland Chamber of Commerce chief executive Simon Bridges expressed surprise at the trend, suggesting that some individuals might be "buying themselves a job." He believes that New Zealand could benefit from more entrepreneurial spirit, as many people are eager to take control of their careers, especially as redundancies continue to be a challenge in the current environment.
The Restaurant Association's general manager, Nicola Waldren, noted that there is always a high level of movement in the hospitality sector, with new restaurant openings being a common sight in Auckland. Retail NZ chief executive Carolyn Young highlighted that there is an element of churn as businesses change hands or close, indicating a general pattern of movement in the retail sector.
Economists from ANZ observed a slight uptick in apparel spending in July, with a 10 percent increase year-over-year, following a challenging period over the past four years. James Fuller, CEO of Hnry, reported strong growth in the number of people starting out as sole traders, particularly in creative, hands-on service-based businesses. These include construction, cleaning, music, and agricultural operations, with growth rates ranging from 16 to 48 percent compared to the previous year.
The survey shows a broad range of individuals venturing into sole trading businesses, with a significant portion driven by a desire for better work-life balance and control over their work and earnings. Notably, the proportion of first-time self-employed individuals with a salaried job has decreased, indicating a broader shift in the mindset of starting entrepreneurs. Younger individuals aged under 25 showed a particular interest in self-employment, likely reflecting difficulties in securing traditional employment.
Written by urgent.news from RNZ Business's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
