From the beginning of the COVID-19 recession, we’ve expected regions with large food-based primary sectors to weather the economic storm better than those that are highly exposed to international tourism.
Although the movement of people across the globe has come to a near standstill, New Zealand’s exports mean that we still have a large connection to the outside world. Revenue from goods exports are income for many New Zealanders and have thankfully been quite resilient to the effects of COVID-19. It’s hard finding cheerful good news stories during a global pandemic and subsequent global recession.
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.
The COVID-19 threat continues to loom over the economy, with a rise in international cases adding weight to the view that the impact will be longer than originally hoped. New Zealand exports continue to be under pressure, and now supply chain issues are becoming more worrying.
The latest Infometrics Quarterly Economic Monitor suggests that regional economies may be about to turn a corner, with slight improvements in some indicators showing that renewed strength may be on the cards in 2020. However, the risks associated with the COVID-19 outbreak threatens to derail any rebound, with expectations for softer export earnings in the first half of 2020.
The emergence of a new coronavirus strand, COVID-19, has potentially upended both the global and domestic economic outlook for 2020. Although it’s still too early to fully evaluate how damaging the outbreak may be, early signs are for a much larger economic hit than first anticipated, with a growing risk that New Zealand could experience a recession in 2020.
The latest Infometrics Quarterly Regional Economic Monitor points towards a slowing economy, even as growth remains broad-based across the country. Construction activity continues to grow at pace as New Zealand attempts to make up the shortfalls in housing, services, and infrastructure from rapid population growth over previous years.
African Swine Fever (ASF) is now firmly entrenched in every province of China and has recently been reported in several other South East Asian countries, causing an upheaval in the world’s meat market. The Fever, a highly contagious, incurable virus that is fatal to pigs but harmless to humans, has also been detected in parts of Eastern Europe since 2014.
Over the last month there have been a range of concerns raised about the diplomatic relationship between New Zealand and China, with the announcement that the 2019 China-New Zealand Year of Tourism launch event has been postponed and government decisions being critical of China setting a foundation for worry.
New Zealand is at the mercy of international economic trends more than at any time since 2011, according to Infometrics’ latest economic forecasts. On the domestic front, net migration is slowing, the housing market has softened, and the tight labour market means that capacity pressures are inhibiting further growth.