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Recover Canterbury survey confirms need for ongoing business support

Posted By: Renee Walker, 7th June 2011

Findings from a Recover Canterbury survey released today have confirmed the need for ongoing business support, and access to funds including the Canterbury Business Recovery Trust Fund.

The survey administered May 18 – 23 addressed issues including access to premises, retention of staff, and insurance and cashflow.

Survey spokesperson Renée Walker, of Recover Canterbury, says the survey attracted responses from a diverse range of businesses.

“Respondents to the survey included businesses from the retail trade; professional, scientific and technical industries; manufacturing and wholesale, as well as many others,” says Walker. “These respondents represent 24 geographical areas of Christchurch”.

Encouragingly, 95% of businesses surveyed were operating, with only one having closed since February 22. Of those operating, most reported a decline in revenue. A comparison of the impacts of the September 4 and February 22 earthquakes revealed a 12% decline in revenue following September 4, and a 22% decline following February 22.

Walker says the findings of the survey mirror many of the issues Recover Canterbury staff are seeing in the businesses they engage with on a daily basis.

“One of the major issues our Business Recovery Coordinators are encountering is a lack of insurance, or lack of clarity around insurance. One of the most concerning findings of this survey is the fact that only 40% of businesses surveyed had business continuity insurance. Of those with this cover over a quarter had insurance that would last less than six months, with slightly less than 10% holding cover that would last 18 months.”

The survey also reiterates the need for people to support local businesses.

“The most disruptive factor of the earthquake, identified by 43% of businesses, was the lack of customers,” explains Walker. “The best thing we can do now is reengage with local businesses and support them by spending money”.

It is too soon to see the effect of the cessation of the Earthquake Support Subsidy (ESS), however, at the time of survey nearly three quarters of all businesses had not changed their staffing levels since February 22.

Recover Canterbury is a joint venture between Canterbury Development Corporation (CDC) and the Canterbury Employers Chamber of Commerce (CECC). The group administers the Canterbury Business Recovery Trust Fund. 100% of donations to this fund will go directly to Canterbury businesses. This survey will be repeated at regular intervals to monitor trends, which are as important as the absolute data.

Key Findings of the Survey:

Impact of Earthquakes on Business

• 24% of businesses reporting an increase in turnover following the February 22 earthquake. 12% reporting no change and 64% reporting a decrease;
• Overall, businesses reported a 12% decline in revenue following September 4, and a 22% decline following February 22;
• While there was an average decrease in turnover reported, there was a corresponding increase in costs. 41% reported an increase in costs, while only 8% reported a decrease;
• The average increase in costs was 8%;

Continuing Operation

• 95% of businesses surveyed were currently trading;
• Of those who were not trading, most had plans to recommence;
• Only one business (0.5%) had closed, partly as a result of the earthquake;
• The most disruptive factor impacting on business continuity was the lack of customers, identified by 43% of businesses;

Insurances

• 40% of businesses indicated that they held continuity insurance;
• Of these, 39% had cover for six months or less, while only 9% had cover for more than 18 months;
• The most common insurance identified was ‘Organisation Assets and Equipment’, followed by Public Liability;
• 36% of business noted that they were waiting for a claim to be settled.

Business Recovery

• The most common manner in which businesses were recovering from their economic situation was through their own cashflow (57%). Other common methods for funding the recovery included the EQC Subsidy and Saving.
• 57% of all respondents felt that agencies had connected in a manner that met their needs;
• The most commonly identified issues of concern were that the IRD was imposing fines despite issues with the mail service, and that there was no communication from support agencies.

Impacts on Staffing Levels

• Nearly three quarters of all businesses had not changed their staffing levels;
• Where there had been a change, 11% had increased staff numbers, while 17% had reduced the number of employees.

Future Location of Business

• Nine out of ten businesses were unlikely to relocate to within the Central City within 18 months;
• Despite this, 38% regarded the central city areas as a good location for business, while 34% regarded it as a poor or very poor location.

Administration of the survey

The survey questionnaire was developed by Research First in conjunction with CDC. Data collection was undertaken during the period May 18 - 23, 2011. During that period, a total of 201 surveys were completed. This data set provides a maximum margin of error of +/- 6.8%1. Analysis was undertaken using QuestionPro ™.