Facing the greatest economic downturn in a century, Budget 2020 was always going to present a grim picture of rising unemployment, lower economic activity, and ballooning debt. But the Budget also lays a firm foundation for the economy to recover, with spending on areas needed to both respond to, and recover from, the COVID-19 pandemic and resulting economic downturn.
The latest Infometrics Quarterly Economic Monitor shows the first signs of New Zealand’s economic slowdown as the COVID-19 pandemic and recession changes the way that businesses, households, and government operates.
New Zealand has exited the Level 4 lockdown and is now in the Level 3 “waiting room”. Job losses are expected to keep rising as businesses reassess economic conditions and start to downsize. The structural changes New Zealand’s labour market will experience will be significant, as will the need for government support. In this article, we highlight some of the changing trends in the labour market.
With the government turning its mind to how New Zealand can best recover from a severe economic downturn, an ability to rapidly deploy and execute recovery policies will prove critical to success. But our analysis shows that, prior to the COVID-19 pandemic, other government policies such as the Provincial Growth Fund (PGF) haven’t been able to move at pace. A greater focus on local decision making, with a coordinated and integrated approach, provides the best chance for the Provincial Growth Fund to be reimagined as a Regional Resilience Fund.
The rapid deterioration in economic conditions across New Zealand, and expectations for a long, slow, recovery, signal a tough few years for the economy. But New Zealand’s strong primary sector, and position as a food exporter, is likely to provide a solid foundation for regional New Zealand.
New Zealand’s Level 4 lockdown has seen non-essential businesses ordered closed or to work from isolation, causing a rapid shift in how companies across the country operate. Working from home has become the new norm, so this article looks at how many workers in each industry are likely still operating from their home office.
Infometrics estimates suggest that only 53% of New Zealand’s workforce can continue to work during the COVID-19 Level 4 lockdown, with almost 1.2m workers sitting idle for the next four weeks.
The COVID-19 pandemic has sent New Zealand into a full-scale lockdown. In doing so, the government is working to flatten the curve and ensure that lives are saved. There is no escaping that this decision puts the economy into hibernation for the next month. Most of what will be achieved in the next four weeks will be maintaining an economic heartbeat while stamping out the virus as much as possible. If this plan is successful, New Zealand can emerge from the crisis sooner rather than later and thereby maximise its chances of regaining momentum in the economy.
New Zealanders have overrun supermarkets across the country over the last week, with the COVID-19 pandemic inviting panic buying and fear over access to the basics. However, our high-level analysis shows that food production and food imports remain resilient.
The COVID-19 pandemic is causing economic chaos both internationally and in New Zealand. A recession is now inevitable, and the economic ramifications of the pandemic and response will substantially change people’s livelihoods. However, New Zealand is resilient and stands ready to weather this pandemic, and there are actions that can be taken to reduce the severity of the economic blow.