Sarah Mitchell. left, and Andrea Marseglia, right, decided to open their combined business in the Napier CBD, the Harvest Deli and Teresa Cocktail Bar, on December 17. Photo / Paul Taylor
Sarah Mitchell. left, and Andrea Marseglia, right, decided to open their combined business in the Napier CBD, the Harvest Deli and Teresa Cocktail Bar, on December 17. Photo / Paul Taylor
Data from Stats NZ has shown that more Hawke's Bay businesses have been shutting down than opening, but those on the ground say businesses are now reversing the trend.
For the first time since a period following the global financial crisis from 2009 to 2013, more businesses ceased operating inHawke's Bay than were created in 2020.
According to provisional Stats NZ data released late October 2021, there were 1920 business "deaths" and 1917 business "births" from the February 2020 to February 2021 period.
A "business" in this dataset is defined by Stats NZ as "A separate operating unit engaged in New Zealand in one, or predominately one, kind of economic activity from a single physical location or base."
This means some types of company on the register like shelf companies and trusts are excluded from the data, and the data is less accurate for some types of small enterprise.
A business "death" is defined by Stats NZ as permanent, not including exits from the population due to temporary inactivity, mergers, takeovers, break-ups or other restructuring of a group of businesses linked by ownership or control.
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Minister for Small Business and for Regional Economic Development Stuart Nash said an increase in companies closing over that period was not surprising as it coincided with the first Covid outbreak.
"There have been significant developments in the economy since February 2021, including periods of historically high GDP growth of almost 5 per cent per annum, and low unemployment."
He said regional economic development is a priority for the government and is part of their wider strategy to support businesses and jobs.
"In Hawke's Bay alone, there are 122 government-funded regional economic development projects with government investment of $263 million."
The projects include rail links to Napier, a food innovation hub, water storage projects, sports facilities, housing redevelopments, better roads, bridges and cycle trails.
He said record numbers of residential building consents issued in Hawke's Bay last year meant the construction sector and tradies were kept busy, and that the increased housing supply would attract more people to move to Hawke's Bay for work.
Minister for small business and for regional economic development Stuart Nash said the trend was not surprising given Covid's effects but the national economy was strong. Photo / Mark Mitchell
Andrea Marseglia and Sarah Mitchell decided to open their business The Harvest Deli and Teresa Cocktail Bar last year on December 17 in Napier's CBD.
Marseglia said they felt there was a massive gap in Hawke's Bay's market for an innovative cocktail bar.
"We decided to try, possibly in the worst time ever to have started. But we just decided to not worry about anyone else apart from ourselves and we just put together all the savings that we had to create a real different space."
Nash said he had seen many small businesses close down in Wellington and Auckland in particular, but not so much in Hawke's Bay.
"In Hawke's Bay it felt that places that were compliant to the rules and vaccinations and all that, they have been fairly busy."
He said there were many challenges that remained for a small business starting out, from suppliers to qualified staffing, to Covid lockdowns.
"We are lucky enough to be able to say we are going quite well. We wish we could go extra well!"
Napier Business Inc general manager Pip Thompson said the occupancy rate in the Napier CBD had never been better, contrary to what the regional data suggests.
"I can only comment on Napier CBD to be fair, and Napier CBD is thriving. There have been about 13 new businesses open since Labour weekend. We are looking at people from outside the region moving to Hawke's Bay specifically to buy businesses."
She thought the biggest reason for business closures was the struggle to find staff in the hospitality industry.
"The biggest cost to a business is wages. You need to be able to afford to pay the wages, but you also need to be able to get the staff to stay open and pay the wages. So there will be a lot of business out there thinking 'gosh, this has just gotten too hard', and will have to close up."
A Hawke's Bay Chamber of Commerce spokesperson said while the global pandemic has had a big impact resulting in business closure and redundancies, New Zealanders have taken the challenge in stride.
They said they are working on programmes with the Central Hawke's Bay District council and Wairoa Young Achiever's Trust to deliver courses to help people starting businesses.
"While it is always distressing to see businesses close their doors, we expect that this new wave of entrepreneurs will be prepared for the challenges of operating a business."
