New Zealand insolvency cases climbed in the third quarter, even as indicators of economic recovery began to emerge.

The BWA Insolvency Quarterly Market Report shows total insolvencies rose 5% from the previous quarter, increasing from 738 in Q2 to 777 in Q3. While this is 6% lower than the same period last year, the quarterly rise signals ongoing stress for businesses burdened by legacy debt and tighter credit conditions.

BWA Insolvency principal Bryan Williams says the data reflects a “game of two halves” in the economy.

“On one side, you’ve got irrepressible forward-looking indicators—share prices rising, real estate agents bouncing back, building permits up, and even ready-mix concrete demand forecasts improving,” says Williams.

“But then there’s the other half: companies weighed down by cost inflation, credit tightening, and enforcement for unpaid taxes. For those burdened with debt that earnings can’t service, the future is bleak.”

Williams warns that creditor behaviour is shifting toward what he calls “healthy destruction.”

“Creditors are accelerating the exit of firms that can’t recover. It’s a harsh reality, but it’s shaping the market,” he says.

Construction continues to dominate insolvency statistics with 192 cases this quarter, slightly down from 197 in Q2 and 215 a year ago. Williams says while the numbers look high, they need to be viewed in context.

“Construction is a $17 billion industry representing around 7% of GDP. It’s a large sector with many tributaries feeding thousands of families,” he says.

“Although it appears overrepresented in insolvency data, its failings are proportionally low compared to its economic weight, especially when you compare it to sectors like hospitality, which runs a close second in insolvency stakes but contributes far less to GDP.”

Despite the pain, Williams sees a brighter future ahead. “Building permits rose 7.2% in September, and ready-mix concrete demand is forecast to grow by more than 8% annually. These are strong leading indicators. In the coming months, we expect a reversal of the recent contraction and new activity to become evident,” he says.

While construction remains the largest contributor, the sharpest increases came from transport and delivery (up 29% from Q2 and 40% year-on-year), manufacturing (up 21% from Q2 and 37% year-on-year), and food and beverage (up 15% from Q2 and 27% year-on-year).

“Transport operators are squeezed by fuel and compliance costs, manufacturers by input prices, and hospitality by discretionary spending patterns. These pressures are structural, not just cyclical,” says Williams.

Williams says optimism is returning to the broader economy. “Interest rate cuts and stabilising costs are fuelling confidence that the economy is entering an upward phase,” he says.

“New Zealand is a small economy but a powerful one. With strong systems, technology infrastructure, and Kiwi ingenuity, businesses are capable of leading the economy to a new level of prosperity.”

Williams cautions that external risks remain, including geopolitical tensions and trade policy uncertainty, but says the fundamentals are strong.

“If tensions ease and trade barriers fall, investment will return. If they escalate, enthusiasm will dampen. But the underlying capacity for growth is there,” he says.

Key Q3 2025 findings:

• Total insolvencies: 777 (up 5% from Q2, down 6% year-on-year) 
• Construction: 192 cases (down 3% from Q2, down 11% year-on-year) 
• Transport & delivery: 49 cases (up 29% from Q2, up 40% year-on-year) 
• Manufacturing: 52 cases (up 21% from Q2, up 37% year-on-year) 
• Food & beverage: 76 cases (up 15% from Q2, up 27% year-on-year) 

The full Quarterly Market Report is available here: https://bwainsolvency.co.nz/wp-content/uploads/2025/12/BWA_Insolvency-Market-Report_Q3-2025_FINAL.pdf

About BWA Insolvency
BWA Insolvency is a leading insolvency firm that supports New Zealand businesses through liquidations, receiverships and voluntary administrations (VA), specialising in VA in particular. Founder Bryan Williams has 30 years' experience in the industry and has recently become just the second person in New Zealand and one of 200 people worldwide to be named a Fellow of global insolvency organisation Insol International.

About the BWA Insolvency Quarterly Market Report
BWA Insolvency has been tracking data on liquidations, receiverships and voluntary administrations since 2012. The Registrar of Companies Office records the filings of companies that have gone into a formal state of insolvency. BWA Insolvency then does a deeper investigation to show industry trends and provide a detailed snapshot of what's happening in the market for the Quarterly Market Report.

With only three drug treatment courts in the country, experts are meeting in Auckland to explore how these specialist courts can save money, support recovery and reduce reoffending, particularly at a time of escalating meth-related harm.

Latest Ministry of Justice figures show people who complete the Alcohol and Other Drug Treatment Court reoffend far less than comparable high-risk, high-needs offenders in the District Court: 50 percent less in their first year after finishing the court programme. This reduction continues at four years, with 20 percent lower reoffending rates.

Judges, policymakers, researchers, treatment providers, and people who have experienced the drug treatment courts first-hand will discuss cutting-edge research and the human and monetary value of the courts at the Alcohol and Other Drug Court Conference on 4 and 5 December at the University of Auckland. (ref. www.aodt-court-conference-aotearoa-2025.co.nz/ )

Senior law lecturer Dr Katherine Doolin says many New Zealanders are at a geographical disadvantage when it comes to accessing drug treatment courts, with the country's three courts all in the North Island: Waitākere, Auckland Central and Hamilton. 

“With methamphetamine use continuing to rise, it's timely to strengthen, develop and expand these courts so more communities can benefit.”

The Alcohol and Other Drug Treatment (AODT) Court, which began in Aotearoa New Zealand in 2012, provides pathways for people facing prison for offending fuelled by substance use to remain in the community to deal with their underlying issues. The results of this challenging work can be transformational.
 
The 300th graduate of the alcohol and other drug treatment court, Melanie Rauth, can vouch for that. Rauth, who works as the Team Lead (alcohol and other drug) Support Worker at Auckland City Mission, faced several charges, including burglary offences, possession of methamphetamine, and driving while disqualified.  
 
“What the drug treatment court gave me was a chance, a chance to rewrite my story. Stepping into the courtroom of the AODT Court is so different to a normal court; they talk with you, not at you, they hear you, they listen. They treated me like a human being.”

One of the founders of New Zealand's Alcohol and Other Drug Treatment Court, Judge Lisa Tremewan, has worked closely with drug court participants and treatment providers for more than a decade.

“It’s uplifting to see how those in court respond – often they’ve been at rock bottom, but I’ve seen how transformative it can be. In fact, over 40 of our graduates are now working in the treatment sector and using their lived experience to support others on the same journey.”

It was the quality of the AODT Court system in New Zealand that inspired US treatment court expert and conference keynote Dr Shannon Carey to feature local court sessions and meetings in her US court trainings to demonstrate best practices.
  
This was a full-circle moment: Carey provided consulting and training for the setup of New Zealand's drug treatment courts based on best practices and research from the US.
  
Carey, who specialises in treatment court cost analyses, says that when drug treatment courts follow established models and research-based best practices, they save money.
 
“Successful participants reunite with their families, who are often estranged due to their substance use, they get jobs, enjoy better health and become a contributing member of their communities. Not only is the treatment court approach more effective than the more traditional court processing and incarceration, it’s also a vastly more humane way of treating people.”
 
The AODT Court Conference features other international experts, including trauma-informed courts’ specialist Dr Brian Meyer; former US prosecutor and probation chief Helen Harberts; Dr Doug Marlowe, a globally recognised figure in drug court research and policy; drug-testing expert Paul Cary; and addiction-recovery researcher and activist Professor David Best.
 
New Zealand’s experience is a central focus of the AODT Court conference, with discussions about why drug treatment courts work, who they are most effective for and the core elements of good practice.