Hawke’s Bay’s economy may have experienced a sharp contraction from Covid-19’s economic fallout, but according to Infometrics’ regional quarterly economic monitor report, we’re doing better than much of New Zealand.
The latest report covers the quarter and 12 months to 30 June 2020, capturing New Zealand’s Level 4 lockdown period and the return to Level 1 in early June.
Carolyn Neville, CEO of Business Hawke’s Bay says that the past quarter has been very challenging for businesses and the wider community.
“As expected, there has been a sharp reversal in the fortunes of our economy, with many key measures showing either slowing growth or negative growth. Lockdown has put tremendous pressure on local businesses and people. Despite this, our primary sector strength has insulated Hawke’s Bay from the worst effects so far, providing a base level of economic momentum.
“We are currently doing better than New Zealand on many measures, but there is real concern for Hawke’s Bay’s long term outlook and what happens when government support ends.”
While house prices continue their upward trajectory, fewer properties are selling. However, the outlook for the construction sector is positive, with the number of residential consents and value of commercial consents in the year to June 2020 soaring, up 44.3% compared to the year prior – good news for the construction industry and its supporting trades.
And while the region’s provisional GDP only fell by 0.9% for the year to June compared to the previous year, the June 2020 quarter tells a more dramatic story, with the Hawke’s Bay economy shrinking by 9.2% – a direct result of the lockdown measures.
Unsurprisingly, tourism spending decreased by 8.2% in the 12 months to June 2020, with visitors spending $611 million, compared to $666 million the previous year. Unemployment remained steady at 4.4%, but the number of people unable to look for work due to lockdown and represented in the “not in the labour force” category, rose 3.1%. Neville expects that number to rise.
“Once the wage subsidy rolls off we expect many businesses will make the tough decision to lay people off and Hawke’s Bay unemployment and jobseeker numbers will rise.”
Photo: Hazel Redmond and Tribune