Snapshot for business & agri-customers
The current volatility and uncertainty caused by the situation in the Middle East, along with rising fuel prices, are significant concerns for many businesses at this time. Many businesses are currently prioritising these issues.
Running a business at a time like this can be challenging. However, New Zealand businesses have demonstrated their resilience through previous difficult periods.
ANZ data reflects an estimated spending lift of about 30% at fuel stations from February to March ’26. Price, rather than volumes, has primarily driven this increase.
Fuel price rises appear to be leading Kiwis to spend more at the fuel pump with less on discretionary purchasing.
Conversely, for businesses, fuel isn’t a mere line item. It ripples through freight, inputs & cash flow timing. It may keep stinging well after the initial shock. Business and agricultural customers are experiencing the effects.
Growing concern from some sectors about what happens next is leading to uncertainty regarding future market stability and potential changes in consumer behaviour. The tail-end effects include volatility, inflation pressure, and the practical costs associated with reworking supply chains and operating models.
2 key actions for businesses needed right now are keeping up-to-date on current developments. This is whilst also reaching out to trusted advisors to initiate plans in place across a range of scenarios.
Lorraine Mapu, Managing Director of Business & Agri at ANZ New Zealand, states that the challenge for many businesses is that even when supply improves, volatility and higher prices may continue to affect freight costs in addition to key inputs. These impact cash flow.
Mapu added that they were remaining close to their customers to understand the pressures they were facing, besides identifying areas where we could provide support if needed.
The businesses that tend to come through well are those that engage early. This is with their bankers, besides their advisors & plans for a range of scenarios. This is rather than focusing on a single ‘back to normal’ outcome.
Mapu also opined that their size & scale mean that they have the capacity to look across industries to understand their exposure. The goal is to fuel price & commodity increases, besides the impact they may have.
Such insights, along with information from other businesses, may help in informing how to respond to this ongoing situation, particularly by identifying effective strategies to manage rising costs and supply chain challenges.
What customers share
Across customer conversations, 3 themes sit beneath headlines: they are costs, containers & confidence. In plain terms, it’s for business & agri customers.
Costs: fuel, freight, energy & inputs flow quickly into margins besides cash flow.
Containers (logistics): disruption may be uneven, although it can be highly disruptive, especially when it drives higher costs, longer lead times, and volatility.
Confidence: more customers adopt a cautious ‘wait & see’ approach. Such behaviour tends to delay discretionary spend or investment.
Businesses are starting to pass on costs. The size of increases is difficult for lower-margin businesses.
While the situation is quite fluid, there is increased price creep on consumer goods, which is beginning to register in most retail sectors. Non-essential consumer services’ demand is declining. Such behaviour may not be unusual. Inventory management may become an important aspect of the business to monitor closely.
Confidence effects are emerging in cautious decision-making. In some cases, the process may include deferring investment decisions.
Attention tends to be increasing on ‘what happens next’. These are the knock-on impacts of higher inflation, wage adjustments, and the ongoing costs of rebuilding or reshaping supply chains.
If fuel & commodity supply conditions improve over time, distribution may vary, leading to fluctuations in pricing and availability that could impact overall operational costs and strategic planning for businesses. That variance itself may create cost & planning risks.
The larger risk for many businesses is not a single price spike. Persistently high prices, besides fragile supply chains, may amplify cost volatility. This is particularly so for smaller enterprises with less buffer.
