Economy still biting for NZ businesses, productivity and growth top theagenda in 2025 – Datacom research

Economic uncertainty has surged as a top concern for businesses heading into 2025, with 77% of senior business leaders in organisations with 100 or more employees citing it as a threat to their business over the next 12 months, up from just 13% in 2024.

The results, which come from Datacom’s latest Business Outlook Survey, show that New Zealand organisations are responding by focusing on workplace productivity (29%) and growth (28%), which ranked as the top business priorities for the year ahead.

Staff retention and recruitment, which ranked as a top three business priority last year, has dropped to fifth, with only 9% of respondents listing it as a top priority for their organisation.

Datacom New Zealand Managing Director, Justin Gray, says the results reflect the challenging environment businesses have had to navigate for a prolonged period.

“The past two years have been challenging for businesses as New Zealand navigated a recession but the outlook for 2025 is promising, with recovery gaining momentum. The Business Outlook Survey findings show that while economic uncertainty remains a key concern, New Zealand businesses are demonstrating resilience by focusing on productivity and growth, which, if we can get it right, will set the stage for long-term success.”

Gray says investing in emerging technologies, including AI and automation, and extracting more value from existing technology will help deliver the productivity gains businesses are seeking.

Businesses were asked to identify the biggest technology opportunities for their organisation in 2025, with AI (46%) and automation (41%) topping the list, followed closely by data optimisation (40%).

The majority of New Zealand businesses (68%) also expected to invest more in technology in 2025.

“It is encouraging to see a growing understanding of the value that automation and AI, particularly generative AI, can deliver. Our State of AI Index this year showed that among those organisations already using AI, 80% were reporting a positive impact on business operations.”

Gray says Datacom has seen a rapid uptick in AI adoption – also captured in its State of AI Index – which showed the use of AI among New Zealand businesses jumped from 48% in 2023 to 66% in 2024.

“The results are there for organisations that take the time to identify the problems that AI can help them solve, and where it can deliver efficiency and new opportunities. That’s what our teams are focused on, and creating tools and platforms that derisk AI opportunities or address obstacles to adoption, for example our Enterprise AI Assistant which allows people to safely and securely leverage their own organisational data in their own environment.”

The survey highlights some practical obstacles to adopting AI and other emerging technologies, including budget constraints (34%) and a lack of skilled resources (15%).

“Technology has enormous potential to transform organisations, but businesses need the right support to address skills gaps, budget limitations and adoption frameworks. With proper investment and governance, tools like generative AI can drive significant growth and innovation.”

“While we’ve seen some great initiatives announced or launched over the past year, for example, the Government’s AI Activator, it’s important that as a country we are really focused on not being left behind with our AI adoption. If our global counterparts and competitors reap the gains that AI has to offer and we don’t, it will be incredibly difficult to stay competitive."

The results of the Business Outlook Survey also show cybersecurity is something New Zealand businesses need to take more seriously.

More than a third (35%) of New Zealand organisations have experienced a significant cyber-attack within the last 12 months and that number has jumped to over half (53%) for organisations with 200+ employees.

Government’s first-year report card from business

Last year’s survey identified high confidence in the incoming Government, with 71% of respondents stating they believed there would be greater opportunity for New Zealand businesses to thrive under the new Government.

The report card to date, for businesses with 200 or more employees, shows 65% of respondents ranking the Government as having done a good job of supporting New Zealand businesses while 22% said “no”.

Companies below the 200+ employee threshold have less confidence in the Government’s performance so far, with just 49% ranking it as having done a good job supporting business and 34% saying “no”.

Businesses’ suggested focus areas for Government have also changed from last year’s wish list.

Boosting the economy is now an even greater priority – with 87% of respondents stating it should be the top focus for Government compared to 72% last year.

The second priority on the list for Government this year is export opportunities – with 49% of respondents identifying it as a top focus area compared to just 10% last year.

Last year, improving public services was the second-ranked priority, with climate change in third, but those have dropped to third and sixth respectively.

“Exporting is no longer a peripheral strategy for New Zealand businesses – it’s becoming a core pathway to long-term success. Exports have the potential to turbocharge our economy. It’s encouraging to see exports going from a side conversation to front-andcentre. This reflects a growing recognition that global engagement isn’t just good for businesses; it’s critical for simulating the New Zealand economy.”

“New Zealand’s tech exporters are a good example of the power of exporting even in a tough climate. This year’s TIN200 showed revenue reaching $17.95B – a 7.7% increase despite the economic climate and global headwinds.”

The results come from a Datacom-commissioned survey of 200 senior business leaders (C-suite, senior managers, IT managers) working in New Zealand organisations with 100+ employees, conducted in December 2024 by Curia Market Research.