Quake affected two-thirds of business across Wellington

Wellington Region Chambers of Commerce

Wednesday 21st December 2016

Quake affected two-thirds of business surveyed across Wellington region

More than 62 per cent of businesses surveyed in the Wellington region were impacted in some way by the 7.8 earthquake on November 14.

The survey was conducted by Wellington Chamber of Commerce two weeks after the earthquake and the data collected from members by all five of the region’s chambers of commerce – the Hutt, Porirua, Kapiti, Wairarapa, and Wellington. Businesses were also asked about the impact of the flooding event later the same week.

Wellington Chamber of Commerce Chief Executive John Milford said the survey showed that businesses across the region were fairly resilient, but there was still a lot of work to do.
“The earthquake event could have been a lot worse, and there is a decent chunk of businesses that have to start realising that.”

Of the 711 businesses that responded, 441 (62%) said they were impacted in some way by the earthquake. Some 86 (12%) said they had damage to premises, 60 (8%) had damage to stock, 162 (23%) had some form of closure due to building inspection, 237 (33%) had some sort of staff disruption, and 124 (17%) some form of other disruption.

When asked for further detail of the impact, both direct and indirect, more than 33% mentioned disruption and/or impact on staff, nearly 16% mentioned damage, around 10% mentioned impact for clients, and 7% mentioned the inspection of buildings. Many noted the impact was worsened by both the earthquake and severe weather events being so close together (see below for details of the impact of the weather event).

The major impacts of the earthquake specified:
· freight movement, due to port and road/state highway closure
· travel, due to road/state highway and city closures
· reduction in business activity and sales, ranging from minimal to significant
· significant loss of income anticipated over coming weeks/months
· increase in business activity and sales (repair businesses, social service providers, hospitality providers located north of Wellington).
· business disrupted by power loss
· business impacted by physical damage to premises and/or stock
· closed premises, some from one day, one week, others longer (two weeks plus)
· closed business until building inspected
· staff unable to work due to personal circumstances or caring arrangements
· emotional impact on staff
· relocation of staff and/or services
· cancellations – appointments, courses, accommodation

At the time of the survey, 90% of respondents had returned to business as usual, many within 2-5 days of the initial earthquake. However, 58 (10%) indicated they had not yet returned to business as usual. Of those, 60% were in Wellington City, 35% in Hutt Valley, 12% in Porirua, 7% in Upper Hutt, 9% in Wairarapa, 5% in Horowhenua and 7% in other areas. Of those, 24 (42%) had sustained damage to premises, 34 (60%) had a workplace closure, 22 (39%) had some other business disruption, and 5 (9%) damage to stock.

The most common issues identified were:
· freight/transport issues
· cancellation from customers/clients
· restricted/office closed
· office damage
· reduced sales/Loss of income
· business interruption

Of those that had not returned to business as usual at the time of the survey, just 13 said they would be making an insurance claim, compared with 46 of total respondents who said they would be making a claim.

Economic impact
The economic impact on businesses has been difficult to ascertain because in many cases assessments were still being worked through by business owners and landlords at the time of the survey. The following are preliminary estimates given by respondents in the two weeks following the event – they could be higher or lower.

Some 108 companies provided an estimate of damage to premises, ranging from unknown/awaiting estimate to $25,000 and over:
· under $1,000: 32
· $1,000-$5,000: 24
· $5,000-$10,000: 11
· $10,000-$25,000: 9
· $25,000+: 9
· unknown/tbc: 21

Some 227 companies provided an estimate of cost of disruption to business, ranging from unknown/awaiting estimate to $25,000 and over:
· under $1,000: 28
· $1,000-$5,000: 59
· $5,000-$10,000: 29
· $10,000-$25,000: 44
· $25,000+: 35
· unknown/tbc: 45

Assistance
Of the 414 businesses that responded when asked what support or assistance their business needed with recovery in the short-term, 351 (85%) said they did not require support or had self-managed issues. Of the 399 business that responded to questions about longer-term support, 330 (83%) said they did not require support or had self-managed issues. Others pointed to the need for positive ‘open for business’ messages (11 responses), repairs to building or strengthening required (8), restoration of the port and roads (7), relocation required (5).

Readiness
Of the 421 businesses that responded when asked if they were sufficiently prepared for the event, 270 (64%) said they were, 76 (18%) said they were not, and 71 (17%) said they were partially prepared and could make improvements or have since done so.

Weather event and flooding
Some 357 (50%) of respondents said their business was affected by this event. Those most affected were in Hutt City 144, Wellington 141, Porirua 77, Kapiti 68, Upper Hutt 38, and Horowhenua 21, Masterton 14.

Some 30 businesses (6%) reported damage to their premises, 10 (2%) had damage to stock, 66 (14%) reported some form of closure of the workplace, 216 (47%) had some sort of staff disruption, and 73 (16%) had some form of other disruption.

Comment
John Milford said the fact that 85% of respondents did not require short-term support or had self-managed issues after the earthquake, and that 83% did not require longer-term support or had self-managed issues was a good outcome.

“But we have much more work to do. Having two-thirds of businesses being sufficiently prepared for an earthquake, and a further 17% partially prepared and recognising that they can make improvements, is a good response, but it’s incumbent on the others to lift their game.

“Responsible and sensible employers should be taking steps to ensure they have systems in place to protect both their staff and their ongoing business.

“This survey reinforces that as a region we need to be as prepared as we can be. While many businesses demonstrated resilience, and were able to safeguard themselves, their employees, and families, the Wellington reality is we live in a region with a heightened earthquake risk and there is a real need to ensure we are all better prepared.”

Mr Milford said the closeness of the double-hit event, which many businesses said worsened the impact on their business, was likely to affect business confidence for a while.

“The very early indications from our business confidence survey, which will be released next month, are that the impact of these events has adversely effected confidence.

“It’s a completely understandable reaction, and how hard confidence will be hit and how long it will be affected will depend largely on if big aftershocks resume. Long-term, projections for both the local and national economies are very positive, so all things being equal I would expect a correction in confidence not too far into 2017.”

Note to editors: not all 711 respondents answered every question so the percentage figure total derives from those who responded to the specific questions, not of all total respondents.

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