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And the forecasts are challenging. The latest, most chilling analysis suggests the region has a fight on its hands to reverse the damage wrought during the past few months and then to battle the pandemic’s impacts well into next year.
The Westpac Regional Roundup describes a regional economy hit hard by lockdown and the burgeoning global recession. It has moved from being an economic top performer — its GDP growth used to outpace the national average — to one of the worst affected regions in New Zealand.
In many respects, the roundup details what the headlines and the experience of so many in our comunities have been telling us. It has merely shown us how so many individual stories of uncertainty and of livelihoods lost have coalesced to a dreadful recessionary whole.
Economic activity has been hit hard by the end of international tourism and the slow grind to supplement what was lost with domestic visitors. Accommodation, hospitality, recreational and retail businesses — all significant employers — are either adapting, or closing. Schools and tertiary providers have lost tens of millions of dollars in revenue from international students. The knock-on is immense: jobs, services and investments across every sector that supports the institutions and their students hang in the balance.
None of this will improve while the borders remain closed. The wheels are in motion for a transtasman bubble, but while interstate travel in Australia remains restricted — and new arrivals skip isolation — the Prime Minister’s September date seems a little hopeful.
Our agricultural sector, the enduring and stable bedrock of our regional economy, has its own headwinds. Sheep and beef processing was subdued and many farms started winter with more stock. As with dairy, there are few indications international prices will markedly improve. Most manufacturing and construction activity stopped during the lockdown and demand has been slow to pick up. Your newspaper has carried many stories about firms restructuring and others that have been forced to close. All the while, the job losses mount.
Things could have been worse. Even the opposition parties in Parliament remind us many firms and jobs might have been temporarily saved by the Government’s wage subsidy scheme. The scheme ends in September; the money-go-round will not go-round as it did before the crisis.
There is nuance here. Regional economic indicators are good guides, but they are not the template as to how the recession and recovery will play out. A region is still an assemblage of communities, businesses and people, and our actions can have an impact.
An Otago Chamber of Commerce/Otago Daily Times business poll suggests our region is preparing for a fightback rather than capitulation.
The survey found 19% wanted staffing or human resources advice and 14% wanted advice on restructuring, but most wanted help with marketing and design (41%), cost reduction (31%), financial assistance (27%) and creative or commercial advice (24%). At 19%, more wanted help with product development than with restructuring.
This snapshot tells us the businesses that help grow our communities are focused on the future and they will not give up easily.
It is heartening to learn many are availing themselves of support. They are getting advice through their chamber and their sector groups, and they are extracting help from their banks and the Government. Workers have made reduced hours and changing regimes work, giving businesses the breathing room they need to face the future with clear eyes.
People are working hard to avoid the worst. This must be the lazer focus if the predictions are to be proved too calamitous.