Covid-19 has inflicted significant economic damage on New Zealand and the South Island. While, nationally we are currently close to a ‘best case’ economic scenario, ChristchurchNZ economists project between 6-12 percent drop in GDP in Christchurch and job losses ranging from 9,000 to 36,000.
The sectors/people most likely to be affected are Tourism, SMEs, and vulnerable workforces. (Nationally, we are already seeing significant impact on vulnerable workforces including Māori women in tourism).
In Canterbury, job seeker support recipients have increased 36 percent from 13,256, in first week of January 2020 to 17,994 in the week ending 14 August 2020.
Tourism is an integral part of the Canterbury’s economy, providing $4.9 billion of $30b gross domestic product. The region has 8800 businesses in tourism-related industries, supporting 69,900 jobs. (Source: MarketView 2018).
A May 2019 Deloitte report estimated that retained spending – spending Kiwis would have otherwise done overseas – could be worth more than $1 billion to Canterbury the West Coast.
Recent Tourism New Zealand numbers suggest Kiwis reacting positively to the domestic travel proposition with the number of Kiwi outside their home region peaked at 550,000 on 11 July (during the school holidays)– the highest since March.
That activity appears to have been reflected in Christchurch, which saw an overall spending increase of 9 percent for July 2020 to $481m compared with the same month last year.
However, the recent increase to Level 3 in Auckland and to Level 2 in the rest of New Zealand is likely to have significant impact on domestic visitation and ultimately spend.
ChristchurchNZ has also released a monthly Economic Activity Index which benchmarks Canterbury’s economic activity against New Zealand.
This index provides regular insights on the performance of the economy between the release of the quarterly GDP figures – allowing decision makers to quickly respond to gaps and opportunities.