Christchurch's ongoing earthquakes have had repercussions far beyond the Canterbury area, affecting nearly two-thirds of New Zealand businesses.
According to the 2011 Grant Thornton International Business Report, 18 percent of businesses had suffered long-term effects while 26 percent suffered a medium-term impact.
The survey, which was undertaken after the September 2010 and February 2011 tremors, also indicated that 20 percent had taken a short-term hit.
Tim Keenan, partner in the Christchurch office of Grant Thornton New Zealand, says the report identified a decrease in demand as the most significant factor for nearly half of those affected.
Destruction of transport routes and other infrastructure posed a barrier to a quarter of companies, and damage to homes and business premises accounted for 20 and 18 percent.
“What the earthquakes have done is make businesses focus intently on their own disaster recovery plans and future contingencies,” he says.
Keenan says Christchurch is now facing a shrinking talent pool in regard to 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.”
Keenan says initially many Canterbury businesses 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 ongoing 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."
Businesses focused on global markets would potentially do well provided they could reassure their international customers, he says.