Canterbury business survey shows snapshot of Covid-19 distress

20th April 2020 By Chris Hutching | chris@tourismticker.com | @tourismticker.com

More than 81% of respondents to a survey of Canterbury businesses reported significant financial effects from Covid-19.

This was a rise from the 35% of businesses reporting negative financial effects in March before the lockdown.

The survey was sent to more than 4000 businesses and received more than 447 responses, of which 51 were tourism and travel businesses.

The largest single group of respondents were manufacturers (16%), with the others including accommodation, food, and tourism and travel industries.

Nearly half were focused on domestic markets only, and 34% solely on the Canterbury market.

The data was gathered in early April by Christchurch NZ, the Canterbury Employers’ Chamber of Commerce, Enterprise North Canterbury, and South Canterbury Chamber of Commerce.

Cashflow and finance were the most challenging areas.

“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,” a respondent said.

The next most affected areas were the domestic market and domestic customers (71%) followed by staffing (61%), and production levels (57%).

While respondents thought pressures on these areas would ease slightly once lockdown was over, challenges would remain over the next three months.

Another respondent said the main problem was lack of customers.

“We are 80% reliant on international markets and 20% domestic. We will have to shift that focus to 100% domestic in the coming months.”

As lockdown entered the third week, nearly half of respondents said their employees were unable to work. Only 4% had all staff working as an essential service.

If lockdown continued past four weeks, the respondents who expected significant negative financial impact rose to 87%, with further negative effect expected on employee wellbeing.

Most businesses asked for further financial support – wage subsidies, cashflow support, lease holidays or rent support.

Others sought business advice, tax relief, marketing support, and funding for research and development (R&D), which they said would better prepare them for exit from lockdown because they might have new products to bring to the market.

Leeann Watson, Canterbury Employers’ Chamber of Commerce chief executive, said she had engaged with thousands of businesses over the past three weeks through their Covid-19 advice line, webinars and over email.

She said the survey results supported the sentiment of the businesses they had been supporting and offering advice to.

“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,” Watson said.

“Of course there are still many businesses who are unable to operate to full capacity, if at all, in alert level 3, which 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.

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 were working to deliver support for businesses, such as 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.

Nearly two-thirds (64%) of the survey respondents were from Christchurch city, 20% from Selwyn, and the remainder from elsewhere in Canterbury.

Most respondents had fewer than 20 employees.