Australia’s resilience has improved as the country has rebounded strongly from COVID-19 impacts, while New Zealand has slipped after a reassessment of earthquake risk, an FM Global index shows.

The annual FM Global Resilience Index, which assesses 130 countries, has Australia at 14th place compared with 17th last year while New Zealand has slipped to 18th from 15th.

FM Global Australia Operations Manager Lynette Schultheis says Australia’s overall ranking is supported by low political risk and an assessment of the nation’s strong economic productivity.

“It is an overall view of the economy and how it rebounds,” she told insuranceNEWS.com.au. “The pandemic has just reinforced that Australia when it needs to can really perform very well.”

The resilience index provides a composite picture of 12 objective measures reflecting each country or territory’s economic, risk quality and supply chain conditions.

Australia’s relatively low ranking of 49 on natural hazard exposure, representing the degree a country’s economic activity is exposed to at least one peril such as wind, flood or earthquake, is offset by a ranking of 16 for natural hazard risk quality, reflecting building codes and the level of risk improvement achieved.

Ms Schultheis says Federal Budget mitigation spending commitments are a positive sign for the future and will help raise awareness among businesses as the country looks to shore up its resilience.

“There are so many things that can be done for relatively low cost,” she says. “This funding is really going to help fortify that position for the country.”

Western Europe dominates the top of the FM Global index with Denmark, Norway, Luxembourg, Germany and Switzerland occupying the first five rankings, while Iran, Venezuela and Haiti fill the bottom places.

The US is divided into three zones with the central part of the country ranking ninth, while an area encompassing states on the east coast and adjoining the Gulf of Mexico ranks 17th and the western region is 23rd.

New Zealand’s slide in the rankings compared to last year reflects recent changes in the FM Global Worldwide Earthquake map, which raised the risk hazard assessment for parts of the country.

Ms Schultheis says the index provides important information for companies on the potential for disruptions affecting international suppliers and customers.

Japan, China and South Korea all rank below Australia in the overall index. Thailand, which experienced significant rainfall and flooding earlier this year, ranks 62 on natural hazard risk quality, while Vietnam is placed last on that measure.

“As many companies extend their supply chains in the pursuit of reduced costs and improved competitiveness, they must also evaluate the risk and natural hazard exposure of their key suppliers,” Ms Schultheis says.