by Chris Tobin
Economists are predicting a tough future for regional economies although the Timaru district has been tipped as one which will be more resilient than most.
Economic agency Infometrics said New Zealand was set to experience the greatest economic shock in a century with a possible 250,000 jobs lost in the next year or two.
“Locally, we are very well placed to recover and reignite quicker than many other parts of the country,” Aoraki Development chief executive Nigel Davenport said.
“In no way understating the challenges we are facing, and will continue to face, across our business and wider community as a result of the Covid-19 event, leading economists and others have rightly recognised us as being one of the best-placed districts to cope with, adapt, recover and reignite ourselves.”
The primary sector, food processing and manufacturing, along with transport and logistics and trades, were the district’s strengths, he said.
“Within these sectors and others, nearly 60% of our workforce remained employed through Level 4 lockdown as essential workers versus the national average of 40%.
“Many of our local businesses are adapting to new work practices and meeting the challenges head-on bounce back and bounce back stronger.”
Key factors helping the district he said were its location, sitting within a central hub with approximately 80% of the South Island population; connectivity to markets through road, Primeport Timaru and fibre; as well as the workforce available.
Economic commentators said the national unemployment rate could rise to 15% but this was not expected to happen locally.
“While it’s very difficult to estimate what our local peak unemployment level may be, I doubt we will hit double figures,” Mr Davenport said.
“Social Development [MSD] is expected to release our local jobseeker numbers for May. The numbers will undoubtedly rise over the weeks ahead, as we move beyond the initial wage subsidy period. But it may not be until June and beyond as we wean off wage subsidies that the true picture of unemployment begins to emerge.
“A key focus of Aoraki Development is to work closely with MSD work brokers, local business and others to ensure we redeploy, re-employ but, most importantly, retain those in our workforce who have been unfortunately impacted by this event.
“Regarding the wage subsidy, MSD figures showed an increase of 226 work-ready jobseekers from March to April which we estimate has seen our local unemployment rate rise from 2.90% to approx. 3.75% in this short period.
“The wage subsidy has been a quick and welcomed response from Government. However it is not a silver bullet”.
Mr Davenport said the “once-in-100-year event” also provided an opportunity to “revitalise and reimagine our Timaru district”.
“We have the best foundations to do this and I, along with other business and community leaders, am excited by this.”
At a glance
Infometrics quarterly economic monitor for Timaru district to March shown in the year to March 2020
- GDP grew 3.2%, well ahead of the national rate of 1.7%
- House values rose 2.4% to $382,466 (below NZ average 5.9%) as sales fell 5.5%
- Residential housing housing consents dropped 11.7%, non-residential dropped 36.3%
- Jobseeker Support increased 17.4% (NZ 11.7%)
- Consumer spending increased by 2.8% (NZ 3.0%)