Helping yourself through the tough times – NRC

Without doubt one of the most enjoyable parts of running National Road Carriers is meeting our members. I’m privileged to meet all types of people up and down the country, across all the transport sectors. Each business is unique.

One of the first questions I ask is – how’s business, and are you starting to see any green shoots of recovering customer demand?

The answers are as broad as our member base, but this year a consistent theme is noticeable. The green shoots are slow in coming.

There is no question this is one of the toughest times for businesses in New Zealand in the last two or three decades.

It is very clear from my conversations, and in fact those of our entire team, that our members are doing it tough in a way they haven’t for a very long time. We hear daily the pressures this puts people under and the challenges they face.

A quick perusal of headlines this week will confirm it is very real.

Business liquidations in New Zealand have surged to a 10-year high, with 2500 companies ceasing operations last year. This marks the highest annual figure since 2014, indicating particularly challenging conditions for the construction and retail sectors. Compared to 2023, the number of liquidations increased by nearly 700, while receiverships also climbed to 186 companies – the highest level since 2012, and an increase of 84 from the previous year.

Mortgage arrears have risen significantly too, with 24,000 people in arrears as of March, a 7% increase from the previous year. Reserve Bank data shows non-performing housing loans rose by $61 million between February and March, reaching $2.412 billion. This figure represents a substantial increase from March 2024 and reflects the ongoing financial struggles faced by many households.

This recession is particularly badly timed (although there’s never a good time, of course). The upward trend in liquidation and receivership numbers has persisted since the pandemic began.

If it feels like business instability has been going on a long time, you’re right – we’re now entering our sixth year of it.

There’s more than enough gloom to go around then. And yes, there is danger in talking ourselves into a deeper hole.

But it is crucial transport operators acknowledge how challenging the situation is, and the implications for your business. Hoping it will go away and taking a head in the sand approach is the worst thing to do.

Taking a realistic assessment of your business allows you to plan to survive the lean times.

Where to start?

Keeping things simple by taking a back-to-basics approach is a good start.

How tight is my cashflow? Are there any fixed expenses I can get rid of?

What are my debt servicing levels? Can these be adjusted?

Do I have my outgoing payments prioritised based on cashflow?

Perhaps the most important question is: Who can help me?

There is no need to do this on your own.

The first stop is always your accountant. They have the best picture of your business and can give you targeted advice.

Courageous conversations may be needed to explain to customers, to lenders, to suppliers or even the IRD where your business is at. The earlier you start, the more options you can explore together and agree on a plan to manage the situation.

Our team at National Road Carriers can also provide expert advice. We’ve seen it all over our 89 years of serving the road freight industry. We have tools such as our cost model that manage transport run costs to the nearest dollar, equipping you with the best information to make decisions.

The golden rule is – don’t leave it too late.

And as for the green shoots?

Unemployment defied expectations and remained unchanged at 5.1%, which suggests this may be as high as it gets. Reducing interest rates will stimulate the economy.

I’ll leave the last words to former Prime Minister Sir John Key.

Addressing the audience at the Icehouse Ignite ‘25 Growth Summit, he expressed optimism about the recovery of the local economy. Sir John pointed out that any economy is fundamentally a confidence game, and he believed that confidence was beginning to return. Kiwi confidence, according to Sir John, is closely tied to house prices, which he expects to rise as interest rates fall.

“I’m not some sort of Pollyanna; I’m not saying everything is going to be roses in two months’ time,” he remarked. “Whether the economy will be stronger or weaker in 18 months … I think it’s going to come right because those factors are there, notwithstanding a very challenging global environment.”

– By Justin Tighe-Umbers, chief executive, National Road Carriers

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