Two-thirds of NZ businesses take earthquake hit

Photo / Mark Mitchell
Photo / Mark Mitchell

Nearly two-thirds of New Zealand businesses were affected by the Christchurch earthquakes, with almost 20 per cent of those suffering a long-term hit from the disaster.

The figures are contained in the The 2011 Grant Thornton International Business Report, undertaken following the September and February earthquakes.

About 18 per cent of businesses said they had suffered long-term effects, one quarter reported a medium term impact and 20 per cent had suffered a short-term hit from the disasters.

Grant Thornton New Zealand Christchurch office partner Tim Keenan said one of the over-riding problems facing business in the city post the earthquakes was the shrinking talent pool for staff and senior management.

"With it being unlikely that people, outside of the construction sector, will move to Christchurch in the medium term, the demand impact for talent and skills is likely to have an inflationary effect on wages and salaries.

"A critical focus of employers in the region is the retention strategies they are executing in their businesses as this demand for talent rises."

"While the impact has hit Christchurch the hardest, businesses across New Zealand have also been affected.

The report identified a decrease in demand as the most significant factor, impacting 48 per cent of those affected while the destruction of transport routes and other infrastructure affected 26 per cent of the companies.

Almost one quarter reported a reduction in staff and management morale while 20 per cent of staff and management suffered destruction of their homes.

The destruction of business premises affected 18 per cent of businesses.

"What the earthquakes have done is make businesses focus intently on their own disaster recovery plans and future contingencies," he said.

Keenan said that initially many businesses in Canterbury were upbeat about the short-to-medium term impact of the earthquakes on their business.

"However, for those businesses who are dependent on local demand, the on-going uncertainty caused by the aftershocks and the interim potential for Christchurch's population to decrease, means that the health of the business has to be monitored constantly."

- NZ HERALD ONLINE

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production bpcf01 at 29 Dec 2014 04:26:22 Processing Time: 470ms