AI-Driven Productivity Gains in New Zealand (2025)

by | Jun 25, 2025 | News

New Zealand’s businesses are experiencing notable productivity increases in 2025 due to the use of Artificial Intelligence (AI). Across diverse industries – from manufacturing floors to rural farms – AI technologies are streamlining operations, cutting costs, and augmenting the workforce. This report examines key sectors, backed by detailed statistics and trends, and compares New Zealand’s progress with global peers. It also discusses challenges, government initiatives, and future outlook, providing a comprehensive picture of AI’s impact on productivity in NZ.

AI Adoption (2025)

82%

of New Zealand organizations report using AI in their operations

Efficiency Boost

93%

of businesses say AI made workers more efficient

Cost Savings

71%

of firms achieved operational cost savings through AI adoption

Job Replacement

7%

of companies report AI directly replacing any workers

Overview: AI Adoption and Productivity Trends in 2025

AI is widely adopted by New Zealand businesses, driving significant productivity gains. 

Surveys in early 2025 show that 82% of NZ organizations now use AI in some capacity, a sharp rise (15% increase) from late 2024. The payoff has been substantial – 93% of businesses report that AI has made their workers more efficient.

Automation of repetitive tasks and smarter data insights allow employees to focus on higher-value work, boosting output per person. In fact, 70% of New Zealand CEOs say AI has made their workforce more efficient, far higher than the 42% of CEOs saying the same in neighbouring Australia.

Companies are also seeing financial benefits from AI-powered productivity. Over 56% of firms report a positive financial impact from AI (up from 50% previously), with 71% citing savings in operational costs due to AI efficiencies. These savings come from reduced waste, optimized resource use, and lower labor costs for routine tasks. Notably, most businesses have achieved these gains without mass layoffs – only 7% of organizations report AI replacing workers.  Instead, many firms note they simply need fewer new hires because existing teams, augmented by AI, can accomplish more.  This trend has helped firms maintain productivity even amid a tight labour market.

Figure: Rising AI Adoption and Impact (2023–2025) – The timeline below highlights the rapid growth of AI use among NZ businesses and its impact on productivity over the past few years:

2023 – Initial Uptake

%

About 48% of NZ businesses were using AI tools, as companies began exploring automation and analytics.

2024 – Acceleration

%

AI adoption surged to 66% of businesses by late 2024, with 80% of users reporting positive impacts on productivity.

2025 – Mainstream

%

Over 82% of organizations use AI in 2025, and 93% report improved efficiency. AI and automation are top investment priorities for NZ firms.

Key drivers behind this trend include economic pressures and technological opportunities. Coming out of a late-2024 recession, 29% of NZ businesses set productivity as a top priority for 2025, ahead of concerns like staff retention.  Emerging technologies – especially generative AI and automation – are seen as critical enablers for this productivity push.  A Datacom business survey found 68% of companies planned to boost tech investments in 2025, with AI (cited by 46% of firms) and automation (41%) leading the way.  This reflects a strong belief that AI can help “do more with less” amid economic uncertainty, allowing growth despite a constrained labor market or budget limits.
In summary, AI adoption in NZ has reached a tipping point in 2025 – the vast majority of companies are leveraging AI, and they are seeing faster workflows, better decision-making, and cost efficiency as a result. The following sections delve into how different industries are harnessing AI, the nature of these productivity gains, and the broader implications for the workforce and economy.

Sector-by-Sector Impact of AI on Productivity

AI’s impact in New Zealand spans every major sector, though the extent and nature of adoption vary by industry. Manufacturing plants, farms, hospitals, banks, and more are integrating AI tools to streamline their operations. Below we break down the key industries where AI has significantly boosted productivity in 2025, and how each sector is utilizing AI technologies:

Manufacturing

AI-powered automation, quality control, and predictive maintenance are boosting factory efficiency and output.

Agriculture

Precision farming with AI (smart sensors, drones, analytics) is improving crop yields, resource use, and sustainability.

Healthcare

Healthcare is adopting AI for administrative tasks and data analysis, easing staff workload while cautiously moving into clinical AI.

Financial Services

Banks and financial firms use AI for customer service chatbots, fraud detection, and algorithmic analysis, speeding up services.

Manufacturing Sector

Manufacturing in NZ has embraced AI to enhance efficiency and quality. In factories and production facilities, AI-driven automation is streamlining operations. Robots and intelligent machines handle repetitive assembly tasks, working alongside human operators. This reduces errors and frees workers for higher-skilled jobs like oversight and optimization.  AI systems analyze vast amounts of sensor data in real time to identify inefficiencies that human operators might miss. For example, AI can automatically adjust production line speeds or materials supply to eliminate bottlenecks, resulting in smoother workflows and higher output.

Quality control has improved thanks to AI-powered vision and detection. Machine learning algorithms inspect products for defects far more reliably and faster than manual checks, catching issues early. This has cut down waste and costly rework – ensuring that only quality goods leave the line. Predictive maintenance is another game-changer: manufacturers deploy AI sensors on equipment to monitor performance and predict when maintenance is needed. By fixing machines proactively before breakdowns occur, companies minimise unplanned downtime, extend equipment lifespan, and avoid productivity losses due to equipment failure.

A strong example comes from an NZ heavy machinery company, McLeod Cranes. By using an AI system to interface with its field crews, McLeod significantly reduced the time spent searching for critical information and enhanced its safety response. In the event of a crane fault or incident, “AI can talk to field workers within seconds of an event and provide robust actions immediately,” improving on-site productivity and safety. This illustrates how AI not only speeds up internal processes but also aids in quick decision-making during operations. Despite these advances, the manufacturing sector’s success with AI also hinges on workforce transformation. As routine tasks are automated, manufacturers are upskilling workers to operate and manage the new intelligent systems.  Rather than cutting jobs, many factories are creating new roles for AI specialists, data analysts, and maintenance techs, while retraining technicians in digital skills. This approach ensures that the introduction of AI “redefines roles rather than replaces them,” as one industry expert noted.  In summary, manufacturing in NZ is seeing higher productivity through fewer stoppages, better quality, and optimized processes – all enabled by AI – while concurrently evolving its workforce to collaborate with these technologies.
Manufacturing Sector

Manufacturing in NZ has embraced AI to enhance efficiency and quality. In factories and production facilities, AI-driven automation is streamlining operations. Robots and intelligent machines handle repetitive assembly tasks, working alongside human operators. This reduces errors and frees workers for higher-skilled jobs like oversight and optimization.  AI systems analyze vast amounts of sensor data in real time to identify inefficiencies that human operators might miss. For example, AI can automatically adjust production line speeds or materials supply to eliminate bottlenecks, resulting in smoother workflows and higher output.

Quality control has improved thanks to AI-powered vision and detection. Machine learning algorithms inspect products for defects far more reliably and faster than manual checks, catching issues early. This has cut down waste and costly rework – ensuring that only quality goods leave the line. Predictive maintenance is another game-changer: manufacturers deploy AI sensors on equipment to monitor performance and predict when maintenance is needed. By fixing machines proactively before breakdowns occur, companies minimise unplanned downtime, extend equipment lifespan, and avoid productivity losses due to equipment failure.
A strong example comes from an NZ heavy machinery company, McLeod Cranes. By using an AI system to interface with its field crews, McLeod significantly reduced the time spent searching for critical information and enhanced its safety response. In the event of a crane fault or incident, “AI can talk to field workers within seconds of an event and provide robust actions immediately,” improving on-site productivity and safety. This illustrates how AI not only speeds up internal processes but also aids in quick decision-making during operations. Despite these advances, the manufacturing sector’s success with AI also hinges on workforce transformation. As routine tasks are automated, manufacturers are upskilling workers to operate and manage the new intelligent systems.  Rather than cutting jobs, many factories are creating new roles for AI specialists, data analysts, and maintenance techs, while retraining technicians in digital skills. This approach ensures that the introduction of AI “redefines roles rather than replaces them,” as one industry expert noted.  In summary, manufacturing in NZ is seeing higher productivity through fewer stoppages, better quality, and optimized processes – all enabled by AI – while concurrently evolving its workforce to collaborate with these technologies.
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Agriculture Sector

In New Zealand’s important agriculture sector, AI is proving to be a powerful tool for boosting productivity on the farm. Industry leaders often say “AI is becoming the new fertiliser”, cultivating smarter decisions, healthier soils, and stronger farms. Precision agriculture is at the forefront: farmers are using AI-powered drones and sensor networks to monitor crops and livestock. These tools gather detailed data on soil conditions, crop health, and animal welfare in real time. AI algorithms then analyze this data to guide farmers on optimizing fertilizer use, irrigation, and pest control. The result is higher yields with lower input – for instance, water and fertiliser are applied exactly where needed, reducing waste and improving overall farm productivity. Predictive analytics in agritech helps anticipate issues before they affect output. AI models can forecast weather impacts on crops or predict disease outbreaks in plants and animals, allowing proactive measures. For example, if an AI system flags early signs of a fungal infection in a vineyard via image recognition, targeted treatments can be deployed immediately, saving the harvest. Livestock farmers are also utilizing AI – one NZ agritech company, Techion, developed AI-based diagnostics that evolved from addressing sheep parasitic resistance to enabling remote lab diagnostics for human and animal health

. This cross-over technology not only improves animal productivity (healthier herds with fewer losses) but also opens new efficiency solutions in veterinary and even human healthcare.

The productivity gains in agriculture from AI include improved crop output, cost savings on farm inputs, and labor efficiency. Tasks like fruit picking or sorting, traditionally labor-intensive, are increasingly aided by AI-driven robotics and vision systems. These systems work longer hours and with consistent quality, augmenting the often limited rural workforce. For instance, automated milking systems in dairy farms use AI to optimize milking times and analyze milk quality from each cow, increasing daily milk production per cow and freeing farmers’ time (anecdotally reported in industry case studies).

A notable trend is AI-driven innovation in NZ’s agritech sector, which is also contributing to economic growth. New Zealand has several success stories such as Halter (using AI collars for herd management) and Robotics Plus (autonomous orchard vehicles). Furthermore, a recent tech economy report indicated that AI applications in agritech, along with healthtech and fintech, are expected to drive substantial new revenue – helping AI contribute an estimated NZ$2.1 billion to the NZ economy by 2035. This underscores that agriculture, traditionally a rural strength, is now also a high-tech playground in NZ. By blending AI with farming know-how, New Zealand’s agriculture sector is achieving greater productivity and sustainability, ensuring the country remains a top food producer in an AI-enhanced future.

Healthcare Sector

Healthcare in New Zealand is beginning to reap productivity benefits from AI, though in a measured way. According to the AI Forum’s latest data, the adoption rate of AI in the “health care and social assistance” sector is around 65%, somewhat lower than in corporate sectors. Healthcare providers have been cautious in deploying AI, focusing first on non-clinical applications that improve efficiency without compromising patient safety. For example, hospitals and clinics are using AI to streamline administrative tasks – scheduling, billing, and record-keeping – which reduces the paperwork burden on staff. Many District Health Boards have introduced AI-driven systems for appointment booking or triage support, enabling administrative teams to handle higher workloads with the same staffing.  One of the most widely adopted AI tools in NZ healthcare is “ambient AI” for documentation, essentially a smart transcription service. Clinicians can conduct a patient consultation while an AI listens in and automatically generates the encounter notes in the background. As described by Kevin Ross, AI Forum’s health sector lead, “You can walk into a clinic, have a consultation with your GP, and the AI will sit in the background and write your notes.” This technology builds on existing medical dictation methods but takes it further by integrating directly into electronic health records. The impact is significant: doctors and nurses spend less time typing up notes and more time focusing on patient care. In an overstretched system, this kind of efficiency is valuable – Ross emphasizes that AI is helping increase the efficiency of an overburdened healthcare workforce, rather than replacing workers. In other words, with AI taking over routine documentation, clinicians can see more patients or devote more attention to complex cases in the same amount of time.
Beyond administration, AI is gradually moving into clinical decision support in NZ, albeit carefully. Early uses include AI algorithms for medical imaging diagnostics – for instance, Auckland-based Volpara Health provides AI tools that assist radiologists in detecting breast cancer and heart disease, improving diagnostic productivity and accuracy. There are also pilot programs using AI for analyzing pathology slides or flagging abnormal results in lab tests, speeding up the detection of conditions. However, as Ross notes, “the health sector is just being cautious when it comes to applications in clinical care”. Data privacy and patient trust are major concerns: health data is sensitive, so any AI that uses patient information must have robust guardrails. There is also an ethical imperative – mistakes by AI in a clinical setting can directly impact patient lives, so healthcare providers are moving prudently, ensuring AI recommendations are transparent and validated.
Thus, in 2025 NZ’s healthcare sector sees AI mainly as a way to augment capacity and reduce burnout. It’s “increasing the efficiency of an overstretched workforce” by handling mundane tasks and supporting decisions, rather than aiming to replace healthcare professionals. For instance, no hospital is letting an AI independently diagnose and prescribe; rather, AI might sort and prioritise scan results for a radiologist, who then makes the final call faster than before. Over time, as trust builds and if governance is strong, we can expect broader use of AI in clinical workflows. For now, the productivity gains in healthcare come through time saved and errors reduced in administrative and diagnostic processes, helping the sector cope with staffing challenges and rising service demands in New Zealand’s healthcare system.

Financial Services Sector

The financial services sector in New Zealand – including banking, insurance, and fintech – is a leading adopter of AI, leveraging it to increase productivity and improve customer experiences. Banks have rolled out AI-powered chatbots and virtual assistants to handle customer inquiries 24/7, which has significantly reduced wait times and freed human agents for more complex issues. For example, if a customer asks about their account balance or needs help resetting a password, AI chatbots can instantly assist, resolving routine queries without requiring a call center representative. This automation of front-line service means customer support teams can manage a larger volume of interactions more efficiently, improving overall service productivity.
Fraud detection and risk management is another critical area where AI boosts efficiency in finance. New Zealand banks and payment processors employ machine learning models that scan transactions in real time to detect anomalies and potential fraud, far faster than manual reviews. These AI systems flag suspicious activity (like unusual spending patterns or possible identity theft situations) and either auto-block them or alert human analysts for swift action. This not only prevents financial losses but also saves considerable analyst hours – the AI sifts through millions of transactions and highlights only the most likely fraud cases for review.
Financial firms are also using AI for data-driven decision-making in lending and investment. Algorithms can quickly assess credit risk by analyzing an applicant’s financial history beyond traditional credit scores, enabling faster loan approvals for customers and more accurate risk pricing for the bank. In wealth management and insurance, AI models can predict customer needs (e.g. when a client might be shopping for a new policy) and identify upsell opportunities, thus enhancing sales productivity. Many NZ fintech companies have innovated in this space: notably, Xero, the well-known New Zealand accounting software provider, has incorporated AI to automate bookkeeping tasks for small businesses.  Xero’s platform can automatically categorize expenses or reconcile transactions using machine learning, cutting down the manual work accountants or business owners must do. This kind of embedded AI in financial tools is saving time for thousands of businesses and accountants, effectively increasing the productivity of the financial services ecosystem.  According to industry analysis, fintech is one of the sectors driving AI growth in NZ’s economy. 
Kiwi companies like Xero and others are delivering AI-powered financial solutions globally, highlighting New Zealand’s strengths in this field. The adoption of AI in finance is quite high – while exact NZ figures aren’t publicly broken out, globally the finance and insurance industry is often near the top in AI usage rates. New Zealand mirrors this trend, with its major banks and insurers actively investing in AI labs and partnerships. For instance, several large NZ banks have dedicated “AI teams” or innovation hubs exploring use cases from robotic process automation in back-office operations to AI-driven forecasting in treasury departments.

The tangible results in 2025 include faster processing times (loans that used to take days approved in hours), fewer errors (thanks to algorithmic checks), and better allocation of human effort to complex tasks. One press release noted NZ’s knowledge workers have one of the highest generative AI adoption rates in the world (84%), reflecting that office workers (like analysts, advisors, and managers in finance) are enthusiastically using generative AI tools to draft reports, analyse data, and even write code for internal tools. This high uptake in the financial and professional services domain translates into productivity: tasks that might take an afternoon can be completed in minutes with AI assistance, compounding efficiency gains across the sector.

Other Sectors: Education, Retail, and Government

Beyond the four major sectors above, other industries in New Zealand are also harnessing AI for productivity gains:

  • Education: Schools and universities are experimenting with AI to personalize learning and reduce administrative load. Educators use AI-driven platforms to tailor educational content to individual student needs and automate grading, where possible. As Dr. Geri Harris, an education sector lead, put it: “We’re not just teaching about AI; we’re using AI to revolutionize how we teach and learn”

    . This means teachers can spend less time on repetitive tasks like marking quizzes and more on interactive teaching. AI tutors and chatbots help answer student questions after-hours, effectively extending support and improving learning outcomes without requiring proportional increases in staff time.

  • Retail and Customer Service: AI is enabling more efficient and personalized retail experiences. E-commerce companies and retailers employ AI for demand forecasting and inventory management – predicting buying trends so that stores stock the right products in the right amounts, thus improving sales productivity and reducing overstock. Virtual shopping assistants and chatbots on retail websites handle common customer inquiries (order tracking, product info), freeing up customer service reps. Marketing departments use AI analytics to segment customers and automate campaign targeting, reaching the right audience with less manual analysis. These improvements help retailers increase sales per employee and optimize supply chains. According to a tech guide, in NZ’s retail sector AI chatbots and data insights guide better stocking and tailored offers to customers, enhancing service without needing a large increase in staff

    .

  • Government and Public Sector: The New Zealand public sector is also gradually adopting AI to improve productivity in governance and public services. AI is used in areas like fraud detection in tax and welfare systems, analyzing data to catch anomalies or false claims more efficiently

    . Some government agencies use AI tools to sift through public feedback on policy proposals or to help draft routine responses, speeding up administrative workflows. Additionally, AI helps with infrastructure monitoring (e.g., analyzing traffic camera feeds to manage congestion in cities, or using predictive models for maintenance of public assets). The Office of the Prime Minister’s Chief Science Advisor has even issued guidance on capturing the benefits of AI in healthcare and other areas, indicating high-level support for AI adoption. However, the public sector remains mindful of ethical considerations and is working within updated legal frameworks (like the Privacy Act) to ensure responsible use of AI

    . When used well, AI allows government employees to focus more on complex decision-making and constituent services, while automating more routine bureaucratic tasks.

(This report was prepared by the Copilot Researcher agent)