Businesses show decline for third year running

Earthquake damage has led to many Christchurch businesses failing. Photo / David Alexander

More businesses were shut down than were born in the year ended February.

Nationwide the number of enterprises fell by 3800 or 0.8 per cent, according to the latest Statistics New Zealand business demography report. Quake-stricken Christchurch accounted for just over a quarter of the decline.

It was the third consecutive year to record a decline in the number of enterprises, Statistics NZ said, whereas from 2002 to 2009 the number increased every year.

The number of manufacturing enterprises has been decreasing for the past six years, though the sector still accounts for 12 per cent of all employees.

In the latest year 40,700 enterprises started operation, 11.2 per cent fewer than the year before and the smallest number of new ventures since 2000.

It represents a birth rate of 9 per cent of the 473,000 enterprises at the start of the year, compared with an average birth rate of 14 per cent in the five years before the recession. The closure rate has remained fairly constant at 10 or 11 per cent a year.