Corporate failures in New Zealand reached their highest level in 15 years in 2025, with construction and hospitality among the hardest-hit sectors, according to a new Deloitte report.
The firm’s New Zealand Insolvency Trends report found that formal appointments – covering liquidations, receiverships, and voluntary administrations – totalled 3,080 in 2025. This represents a 12% increase on 2024 and the highest annual figure since 2010.
The December quarter alone recorded 932 formal appointments, the second-highest December result since 2000, surpassed only by the fourth quarter of 2008 during the global financial crisis. That figure was 34% higher than the same period in 2024.
Deloitte attributed the sustained rise to tighter financial conditions, elevated Inland Revenue tax arrears, and renewed enforcement activity by the tax authority following the withdrawal of pandemic-era relief measures.
Construction was the most severely affected sector. The industry recorded 197 company failures in the fourth quarter of 2025 – 21% of the quarterly total and the highest quarterly figure since Deloitte began collecting sector data in 2022. Annual formal appointments in construction reached 747, up 14% year-on-year, driven by weak demand, rising build costs, cashflow pressure, and a shrinking project pipeline. Deloitte noted that insolvency risk was highest among smaller contractors, with subcontractor failures amplifying stress across supply chains.
Accommodation and food services recorded the sharpest proportional rise, with 149 formal appointments in the December quarter – around 80% higher than recent quarters. Annual appointments in the sector reached 380, up 53% year-on-year. Deloitte noted that the collapse of the YB Sushi group, comprising around 50 related entities, inflated the quarter’s figures, though insolvency levels remained elevated even when those cases were excluded.
Retail trade; rental and real estate services; and transport, postal, and warehousing also recorded significant increases, with year-on-year rises of 36%, 15%, and 28% respectively.
Deloitte said formal appointments taken by the Official Assignee had increased since 2023, with 95% of those appointments being court liquidations – a trend it linked directly to Inland Revenue’s heightened enforcement activity.
The report said recovery was likely to be slow and uneven, favouring larger, better-capitalised businesses. While easing inflation and prospective interest rate relief may improve conditions later in 2026, insolvency risk is expected to remain elevated in the near term.
The scale of the problem was further underscored by Ministry of Business, Innovation and Employment (MBIE) data, which showed 2,867 companies entered liquidation in the year to December 31, 2025 – the largest number since 2010 and the fourth-highest annual total in 25 years. Company removals from the Companies Office register also reached 50,485 in 2025, the highest since 2013.
Kare Johnstone, a partner at McGrathNicol and chairwoman of the Restructuring, Insolvency & Turnaround Association of New Zealand, said the sector had been exceptionally busy. “You combine that with the ongoing rising costs for insurance, rates, rent, and food over the last few years, and customers start to reduce spending,” she said, as quoted by The New Zealand Herald.
Johnstone noted the same industries continued to dominate liquidation data. “Construction comprises around 30% of the liquidation appointments. About 95% of businesses in the construction industry are small, with five or fewer employees, so they won’t have the balance sheet strength behind them in a downturn economy,” she said.
Despite the grim figures, some indicators pointed towards a gradual recovery. The ANZ Business Outlook for November 2025 showed business activity confidence rising from +5 to +21 points, the highest reading since August 2021.
Inflation also returned to within the Reserve Bank of New Zealand’s target band. However, insolvency practitioners cautioned that a meaningful decline in failure rates may not materialise until 2027, as businesses depleted working capital reserves during the period of elevated costs.
