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.
From office building to the home office
Infometrics has used insights from the 2018 Business Operations Survey to understand the proportion of businesses whose workers can work from home. Using some of these insights, combined with Infometrics’ detailed industry and regional employment data, we have estimated the number of workers around the country who can continue operating from home during the Level 4 lockdown. Our analysis points to around 727,000 workers being able to operate from home, comprising around 29% of the national workforce.
Examining New Zealand’s industries, working from home appears to be, unsurprisingly, most common for workers who usually occupy New Zealand’s urban offices. These include workers in the communications and technology, financial, administrative, professional, and public services sectors (see Chart 1).
Naturally, some industries don’t lend themselves to working from home, such as accommodation, shops, agriculture, and construction. These industries are likely to be facing increasing hardship as the Level 4 lockdown continues.
Firms who are unable to have employees work from home are facing the increasingly uncomfortable position of wanting to retain staff, but having no revenue coming in. This difficult position means that some industries are more likely to take steps to reduce their workforce sooner rather than later.
Kitting out a home office boosts spending
Spending data from Marketview shows that spending on home and recreation retailing rose significantly in the week or so leading up to the Level 4 lockdown. Home and recreation retailing includes furniture, electronics, and computer retailing, among other areas. Chart 2 shows the sharp spike in spending activity compared to 2019, prior to it falling away on the first day of the lockdown.
For the seven days prior to lockdown, home and recreation retailing was 80% higher than the equivalent period in 2019. On a daily basis, home and recreation retailing was 172% higher on Wednesday 25 March (the last day prior to the lockdown), but was 99% below normal levels on Thursday 26 March, the first day of the lockdown.
A new era of working is forced on employees
Staying at home, and the new work conditions it requires, means that firms across New Zealand have scrambled to continue communicating. Many firms, including Infometrics, have taken out a subscription to Zoom and similar services to allow for video meetings and collaboration. Chart 3 shows the incredible rise in Zoom’s stock price.
Working from home, and embracing technology is likely to force a rethink across New Zealand businesses as to how to operate even post-lockdown. Increased IT spending is likely as firms seek to make their workforce more mobile and nimbler.
Although the lockdown will likely result in sizeable job layoffs across different industries, for other areas of the economy, the lockdown may present a way to pivot working styles to better suit modern working. Increased remote working could also benefit regions over the medium term, as where you are located becomes less important for some industries.
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