Smiles gone from capital’s commercial sector as 1578 businesses vanish in ‘tough’ two years
Tuesday, 7 April 2026
ANALYSIS: Wellington’s shrinking roll of active companies stands testament to how hard commercial life has become in the city.
Between November 2023 and February this year, a net 1578 companies vanished from the capital region.
Every other region tracked by Stats NZ showed a net increase in active companies, with more than one new company registered for every company that was shut down.
Auckland added a net 6432 companies. Waikato added 1689. Canterbury added 4083.
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For Wellington MP Ayesha Verrall, Labour’s Wellington issues spokesperson, the fault lies squarely at the Government’s feet.
“Thousands of public service job losses have flowed on to impact local tradespeople, shops and cafes across the city,” she says. “All up 10,000 jobs have been lost from the local economy.”
And as for the lost businesses, she says: “These closures reflect a loss of opportunities for young Wellingtonians.”
However, the damage to the Wellington economy, and particularly Wellington’s construction and hospitality sector, goes back to before the current government took power.
Many companies took on debt to stay afloat through the Covid pandemic, and the high inflation period that followed a rapid expansion in government spending under the Labour-led pandemic response.
“Wellington is tough,” says Iain Shepherd from BDO in Wellington, who is often called in to manage company liquidations and receiverships.
There’s been no shortage of work for insolvency professionals like Shepherd, especially for businesses in the construction and hospitality sectors.
Shepherd was in Tauranga last month. Its construction buzz contrasted to the deafening silence in Wellington.
“There are no cranes in Wellington. I counted nine in Tauranga,” he says.
Often the owners of the businesses that land in his lap to be liquidated are not at fault for the failures, he says.
Among them was Naenae-based Atco Steel Developments, a company employing several dozen workers, which saw work dry up, and projects cancelled or postponed.
Its owner Earl van Haeren says the stress caused him to have a heart attack. His marriage broke down under the emotional and financial shame.
“It was very tough,” he says.
“We felt like we never recovered from Covid. We were winning jobs competitively, and then some of the clients turned round and cancelled the jobs,” van Haeren says.
Other jobs were postponed and postponed. Debts mounted. The commercial building market didn’t recover when interest rates finally came down after Covid-spending induced inflation abated.
Looking back, he thinks he held on for too long, something that often happens as business owners strive to turn their flagging businesses around. The collapse was “horrible”, van Haeren says, but he remains grateful for the way that Shepherd treated him.
He came out of the collapse of his business with his life, and his home.
He’s back on the tools again out of necessity, but he’s enjoying training up his son, who is an apprentice, and he looks back philosophically.
“As long as you are six feet above ground, not six feet under,” he says.
The stress that van Haeren experienced was extreme, but stress is the daily stuff of life for a growing number of business owners, according to Chartered Accountants Australia New Zealand.
It has published a report showing auditors were raising more “going concern” warnings for New Zealand companies than at the height of the Covid pandemic.
“Auditors are now flagging greater uncertainty than during the pandemic itself, which shows how sustained economic pressures around liquidity, refinancing and future profitability can be just as challenging for businesses as an acute shock,” said chartered accountant Amir Ghandar.
The report shows that in 2025, auditors highlighted a material uncertainty related to going concern for 15% of New Zealand listed companies, up from 13% in 2021.
Going concern flags were most frequent in consumer staples, health care and information technology, sectors where business models were often capital intensive, dependent on future growth, or exposed to volatile input costs,“ he said.
Not all companies have to get auditors to assess their financial statements, so the sectors singled out in the report do not paint a truly national picture.
The Companies Act requires audits only on companies with 10 or more voting shareholders, and large companies with assets totalling more than $66 million or revenue exceeding $33m, and the report from Chartered Accountants Australia New Zealand covered only sharemarket-listed companies.
Credit reporting bureau Centrix compiles credit reports on all of the nation’s companies, and it published a bubble chart last week showing which sectors were in the best, and worst financial health, based on the likelihood of companies in those sectors missing payments to their creditors, or of going bust.
Hospitality businesses like restaurants, bars, takeaways were the most at risk, but close behind were construction and engineering companies, followed by retail.