The top five risks for doing business in NZ

Business Editor at Large·NZ Herald·

22 Feb, 2019 12:35 AM3 mins to read

Tamaki Drive as high winds and incoming tide start the closure of the main route from the city. 2018 New Zealand Herald Photo by Greg Bowker

New Zealand business leaders and executives have ranked extreme weather events as the biggest concern in the World Economic Forum's Global Risks report for 2019.

The World Economic Forum executive opinion survey asked around 12,000 senior business leaders and executives from the global risk industry to list the top five risks effecting the ability to do business in their nation.

Globally the rise of nationalist and populist politics dominated concerns for the 2019 report. But for New Zealand extreme weather events were top of mind.

The highest ranking concerns in the were typically those that were topical, said Marsh & McLennan Insights executive director Wolfram Hedrich, who was in New Zealand last week to present the research.

"The main threat this year is around countries taking back control, in terms of the economic agenda. A shift away from globalism," Hedrich said. "It's about populist politics fueled by inequality within countries, rising social instability and a shift in the global power relationships."

Over-all risk profiles tended to stay reasonably stable, Hedrich said.

Issues like cyber-security were always high in the rankings.

"But over time we've seen is that environmental risks have risen in people's perception. So extreme weather, natural catastrophes and the risk of climate change adaptation failure are the risks that feature most prominently," he said.

That trend was stood out clearly in the New Zealand results.

"For New Zealand it's a broad range of risks. With climate related risk, extreme weather, topping the chart, closely followed by cyber risk."

The other area which New Zealand respondents ranked high was that of infrastructure shortfall.

This was symptom of strong population growth, Hedrich said.

There was also link between extreme weather, natural disaster concerns and fears about infrastructure - as highlighted by storm-related power outages last year, the report noted.

The risk rankings of New Zealand respondents contrasted markedly with Australians.

Extreme weather and climate change adaptation didn't make the top five in Australia, although energy price shocks topped the list.

Cyber-attack was ranked second.

But then there were concerns about an asset bubble - reflecting the fragile state of the property market in Australia.

The risk of a fiscal crisis rounded out the Australian top five - jointly in fifth place with infrastructure shortfall.