Since the borders were closed in March, we have consistently argued that an increase in spending by New Zealanders on domestic holidays could never make up for the loss in revenue from foreign visitors. Data for 2019 shows that international tourism was worth $16.0b to the New Zealand economy, while Kiwis spent $6.2b on overseas holidays.
Auckland is home to a third of the country’s population, so with the region under Level 3 lockdown, the flow of visitors to all of the country is affected.
The announcement of community transmission of COVID-19 in August has been a reality check on our progress towards recovery. With Auckland now under Alert Level 3 restrictions, and the rest of New Zealand at Alert Level 2, the economic outlook has turned darker. This note provides our initial analysis of the economic effects of the changes, as well as an update on how our view of the economic outlook is changing.
The New Zealand border has been closed since March, and with it, international tourism has all but vanished. International arrivals in July were 98% lower than a year ago, with only 3,521 arrivals. But even though there aren’t many new visitors arriving, there are quite a few still in New Zealand. Data published by StatsNZ estimates there to be somewhere between 90,000 and 140,000 international tourists currently residing across the country, which has implications for employment and support needs.
The night-time economy is generally defined as businesses that do the majority of their trading between 6pm and 6am. In 2019, Infometrics estimates that New Zealand’s core night-time economy was worth almost $10b in economic activity and supported over 180,000 jobs (7% of total employment).
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.
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 Economic Monitor highlights that almost all regional economies continue to grow, driven by population growth and sustained consumer confidence. However, concerns are growing about future growth, with a long, slow, slowdown expected over the next few years.
Events can be a great way to stimulate a local area – bringing a cash injection from out of town visitors, raising the profile of an area and local businesses to visitors and migrants, or simply bringing a community closer together. Many communities choose to support events which align with their strategic goals, but it’s important to assess if the benefits really stack up, and if a public investment is warranted. Infometrics offers an event impact calculator to our regional clients, empowering them to calculate impacts for themselves.