The New Zealand business landscape has vastly improved over recent years, with conditions generally working in companies favour. This is reflected in the latest business demography figures from Statistics New Zealand, which show the country recently reached a significant milestone.
In February this year, the number of businesses surpassed the 500,000 mark for the first time. This marked a rise of 2 per cent from a year earlier and 14 per cent increased from 2005 levels.
It was also the fourth year in a row in which the number of new businesses outweighed those which closed down. Furthermore, the West Coast was the only region that didn't have more company start-ups than the previous year.
The reasons behind the trend
Analysts have taken a look at the statistics and revealed a number of major drivers behind the trend. These include:
- Growth in the construction industry, and residential building in particular
- Stronger business survival rates, especially in the financial and insurance services sectors
- Improving confidence levels among consumers
This final point is reinforced by the ANZ-Roy Morgan New Zealand Consumer Confidence Index, which has recently seen more positive results. Between September and October 2015 confidence levels increased four points, making it the highest level in the past four months.
Economic expectations were one of the main drivers behind the trend. The sub-index increased from -12 to 2 month on month, recouping some of the losses since the three-year low recorded in August.
Positive effects for the wider economy
This half-million milestone is important for the national economy on a number of levels. Not only does it show that New Zealand is a great place to do business at the moment, but also that there's a certain level of financial stability.
Official June 2015 quarter employment figures show there was a 3 per cent annual rise in the number of people in jobs. Statistics New Zealand also revealed a 0.4 per cent yearly increase in the national employment rate.
Another positive impact on the economy is that fewer businesses are failing, which also suggests conditions are improving. Business Register Manager at Statistics New Zealand Stuart Pitts revealed that out of all the companies started up in 2005, 27 per cent are still operational today.
Setting up a business involves making a number of key purchases - including business insurance. Our brokers are experts at assisting you decide the types of insurance cover your new business needs, and also the level of cover vs risk that you can afford.
For established businesses, the current economy may mean turnover has increased, you've taken on more stock, employees or clients. These changes should be reflected in your current insurance program. Our brokers can assist in reviewing your current insurance cover against business levels to ensure that, in the event of a claim, your cover meets your expectations.
About the AuthorName: Wayne Amer
I am a Senior Commercial Broker at Rothbury's Auckland branch. Having spent over 20 years in the insurance industry my passion is broking as it means I get to spend my time assisting and advising clients on insurance matters…
I am a Senior Commercial Broker at Rothbury's Auckland branch. Having spent over 20 years in the insurance industry my passion is broking as it means I get to spend my time assisting and advising clients on insurance matters that will help make their businesses sustainable and successful.Close