Otago hardest hit by lockdown

George St in Dunedin. Photo: Stephen Jaquiery
George St in Dunedin. PHOTO: Stephen Jaquiery
Otago's economy took the hardest hit among New Zealand regions when the Covid-19 lockdown bit, economics consulting firm Infometrics says.

Infometrics released its June 2020 quarterly economic monitor today, and as New Zealand’s economic activity dropped 12.6% per year through the quarter, Otago’s fell further than others — down 15.6% as the collapse in tourism activity hit local economies. However, in Dunedin there was cause for some cautious optimism, Enterprise Dunedin director John Christie said.

Dunedin’s report covered "quite a dramatic period" in the city’s economy. There was also pain in the community from personal loss and hardship that was not quantifiable in reports like these, he said.

But for the past five years, Dunedin’s economy had been strong and reserves that period afforded many in the city had helped them through lockdown.

Dunedin’s economy remained linked to the primary sector, education and other Government and local government spending, which had stayed reasonably constant.

And there were signs that, in some cases, Dunedin had fared better than the national average, and with major construction projects in the pipeline "in the billions of dollars over the next 10 years" there was potential for a rebound.

Infometrics senior economist Brad Olsen said as community transmission had returned to New Zealand there was renewed uncertainty, but for now the lockdown in April and May was the biggest hit to the economy on record.

The effect of the lockdown was clear over the June quarter, when not only did the economy flatline, but it then got an adrenaline hit from a return to near normal in Alert Level 1.

Dunedin’s economy shrank 1.5% over the year to June, according to the consultancy estimates, better than the 2.1% decline for New Zealand.

While the number of Jobseeker Support recipients increased 8% in Dunedin in the year to June, it was up 19% nationally.

Consumer spending was down 4% in Dunedin over the year to June — worse than the national drop of 2.8% — but on a quarterly basis the drop was a stark 23.7% from the previous year.

Dunedin house prices were up 17.1% in June 2020 compared with a year earlier, outperforming Otago (up 11.9%) and New Zealand (7.5%).

But house sales fell off — down 17% in Dunedin, compared with a 13.2% drop in Otago and a 6% drop nationally.

Residential consents were down year on year to June 2020 by 3.4%, compared with an overall 8.1% increase in New Zealand and a 3.2% rise in Otago.

However, the value of non-residential consents increased 69.7% in the city over the year to June 2020, compared with a 44.8% increase in Otago and an 8.8% decrease nationally.

Total tourism spending in Dunedin dropped 17.3% in the year to June 2020, compared with a 14.8% drop regionally and a 12.3% drop across the country.

hamish.maclean@odt.co.nz

Comments

And the DCC 'supports the ratepayer' by taxing us by another 4.5%. The DCC is totally tone deaf to the economy around it-its own bubble.

Did they consider the other lockdown being run in Dunedin? Rather than just the Covid 19 Lockdown. The article doesn't mention the HBB (Hawkins-Benson-Bidrose) planned lock down of Dunedin Streets and Business district.

Had the DCC not screwed with the main roads, the businesses may have been slightly better off.

 

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