Over 81 per cent of respondents to a recent survey of Canterbury businesses are reporting significant financial impacts from COVID-19.
The data was gathered as part of a survey distributed to local businesses in early April by ChristchurchNZ and The Canterbury Employers’ Chamber of Commerce, alongside regional business partners Enterprise North Canterbury, and South Canterbury Chamber of Commerce.
The survey was sent to more than 4000 businesses and received more than 400 responses.
Cashflow and finance were the most challenging areas for respondents, with 81 per cent citing significant negative impact.
One respondent wrote, ‘’We have no income but continue to pay our overheads and our staff as best we can. We will have to wait and see how many customers we lose due to this, and how many are unable to pay us for work previously completed.’’
The next most significantly impacted areas were the domestic market and domestic customers (71 per cent) followed by staffing (61 per cent), and production levels (57 per cent).
While respondents thought pressures on these areas would ease slightly once lockdown was over, challenges would remain for many over the next three months.
Our main problem is supply chain of customers. We are 80 per cent reliant on international markets and 20 per cent domestic. We will have to shift that focus to 100 per cent domestic in the coming months.’’
One respondent wrote: ‘’Our main problem is supply chain of customers. We are 80 per cent reliant on international markets and 20 per cent domestic. We will have to shift that focus to 100 per cent domestic in the coming months.’’
As lock-down enters the third week, nearly half of all respondents stated their employees were unable to work. Only four per cent had all staff working as an essential service.
If lock-down were to continue past four weeks, respondents expecting significant negative financial impact rose to 87 per cent, with further negative impact expected on employee wellbeing (67 per cent, up from current 30 per cent of respondents citing it to date).
The bulk of businesses asked for further financial support: wage support/subsidies, cashflow support, lease holidays or other rent support.
Other support asked for included business advice, tax relief, marketing support, and funding for R&D.
One respondent said: ‘’If the Government can unlock funding initiatives for R&D projects we can be fully utilised on productive work. This would better prepare us for when we exit the lockdown as we might have new products to present to the market.’’
The bulk of the 447 respondents came from manufacturing (16 per cent), other, accommodation and food, and tourism and travel industries. Nearly half were focused on domestic markets only, with 34 per cent focused only on the Canterbury market.
The survey was commissioned in order to better understand the regional impact of the pandemic and subsequent lockdown, across different industries, and ensure support was focused appropriately.
Leeann Watson, Canterbury Employers’ Chamber of Commerce chief executive, said they had engaged with thousands of businesses over the last three weeks through their COVID-19 advice line, webinars and over email.
Watson said the survey results support the sentiment of the businesses they have been supporting and offering advice to.
Leeann Watson, Canterbury Employers’ Chamber of Commerce Chief Executive
The need for ongoing financial support and advice for businesses is essential. Moving to Alert Level 3, where we can increase our economic activity in a safe environment, will certainly help those businesses who have been unable to bring in any income over the lockdown period,”
“The need for ongoing financial support and advice for businesses is essential. Moving to Alert Level 3, where we can increase our economic activity in a safe environment, will certainly help those businesses who have been unable to bring in any income over the lockdown period,” Watson said.
“Of course, there are still many businesses who are not able to operate to full capacity, if at all, in Alert Level 3 who will require further Government support and intervention to ensure their long-term survival.”
Joanna Norris, ChristchurchNZ Chief Executive, said the results of the survey illustrated “the importance of supporting local businesses”.
Joanna Norris, ChristchurchNZ Chief Executive
These are extraordinary times and public health must come first. ChristchurchNZ is committed to supporting local businesses through tangible actions,”
“These are extraordinary times and public health must come first. ChristchurchNZ is committed to supporting local businesses through tangible actions,” Norris said.
Details of progress towards a Christchurch economic recovery package were outlined to Christchurch City Council last week.
As part of the package, the Chamber and ChristchurchNZ are working jointly with partners to deliver urgent support for businesses affected by COVID-19. Those measures include additional business advisors, capability and advisory workshops (delivered remotely), and business mentors.
ChristchurchNZ is also funding a new Business Support Subsidy package worth $200,000 to help businesses impacted by COVID-19.
Nearly two-thirds (64 per cent) of the survey respondents were from Christchurch city, 20 per cent from Selwyn, and the remainder from the rest of the Canterbury region.
Most businesses that responded had less than 20 employees.
An earlier survey sent out in March before the lockdown was in place showed 35 per cent of 600 respondents were feeling significant negative impact in finance and cashflow at that time. It is not possible however to match respondents between the two surveys, but this does demonstrate the significant rise in impact over the last three weeks.