Opportunities arise for some in Covid
From booming real estate to fewer snack sales at the corner dairy, Coromandel retailers are reporting there are winners and losers when it comes to the financial impact of lockdowns. HC Post editor ALISON SMITH and reporter REBECCA MAUGER spoke to retaile
Economists confirmed last week’s Covid-19 lockdown in Auckland will have flow-on effects likely felt around the country, including the Coromandel. Based on cost estimates developed by ASB during the previous lockdown, having Auckland at alert level 3 and the rest of the country at alert level 2 costs the economy about $440 million a week — or 0.15 per cent of GDP.
Thames-coromandel District Council uses a company called Infometrics, which provides information about the local economy to inform financial investment and planning decisions based on what is known about population and demographics.
The latest quarterly data to the end of December 2020 acknowledges Aucklanders are an important economic contributor and reflects the impact Covid-19 is having on the economy.
The region has a soaring house market, strong domestic tourism, strong consumer spending and a small increase in population growth.
Dawn Thompson has a new business in Waihi, as owner of the Doggy Daycare and grooming business 4 Paws, in School Lane.
She has clients who’ll travel from Auckland to bring their pets to board or get a grooming and says the recent Auckland lockdown had an impact on her business.
“Many of the clients don’t want to go away and are not sure with the lockdowns, they are elderly and don’t want to leave the house.”
The lockdown also prevented her from travelling to them for pet grooming, which she does for clients who can’t get to Waihi.
Last year’s lockdown saw a drop in revenue of about 15-20 per cent for Barron’s Pharmacy, says owner Vijay Pillai.
Recent changes in alert levels have brought on a definite dive in retail revenue once again for the Waihi pharmacy.
‘‘People are nervous perhaps, they’re aware that Aucklanders may have come into Waihi and other small towns — those who sneaked through just before the alert level changes — this may have stopped our locals coming out as much.”
Vivien Gerrand of Arkwrights Antiques says the general view of
Paeroa’s retailers is ‘‘just about everyone says they have done better than ever before”.
‘‘Covid has very good to us, my shop has never done as well as this. With all the woes of tourism, we are doing just fine . . . ” But she’s lucky, she says, as antiques don’t expire and neither does she rely on product coming from overseas.
Waihi Beach’s Daisy Chain owner Victoria Anderson says it’s been the ‘‘best year ever” for her homeware and clothing business.
‘‘I have all the local people who have a little bit of spare cash and they’re all here, no one is away travelling and they love my shop and they support me and I just think they’re wonderful customers.”
Victoria saw last year’s level 4 lockdown as a great opportunity.
‘‘I thought ‘I’ll turn this around, what a great opportunity for retailers to have a little break’ because you never ever get a break in retail.”
This time around Victoria is still unfazed by yo-yoing alert levels as she has local support and people come from ‘‘all over” — she doesn’t just rely on Auckland shoppers.
‘‘But I am worried about the economy, we have got to learn to live with this virus. We can’t keep shutting down every time.”
Mitesh Patel, owner of the Tairua Superette, says despite a sunny weekend of good swell there was still at least 20 fewer customers stopping for munchies in the evening or bread and milk in the morning.
“We are affected with the closures, it was much quieter, not like a normal trade at all. It’s not like a winter slow, but slow.”
When regional borders are open, the Coromandel has benefited from Aucklanders making the most of it.
Tourism expenditure increased 1.5 per cent in Thames-coromandel the latest quarter, compared with the 15.6 per cent decrease nationally.
Some $229m was spent by tourists, up $3m from the same time last year.
“Because Kiwis were opting for more drive-based travel rather than flying, and our close proximity to Auckland, we saw our domestic tourism numbers rise 1.5 per cent per annum,” says Laurna White, TCDC Communications and Economic Development Group manager.
The data shows house price growth with the average current house value in the district up 13.2 per cent this quarter compared with the same time last year.
The average house value in Thames-coromandel was $904,897, compared with $806,151 in New Zealand.
House sales increased 13.4 per cent for the year to December 2020, with 1406 homes sold and record high prices fetched in townships including Whangamata and Waihi Beach.
While real estate agents on the east Coromandel say there’s “still good heat” in the market, the recent lockdown has been noted for the quieter streets and open homes.
“Some people got out of Auckland in a hurry but the town has been relatively quiet compared to others due to the Auckland lockdown,” says Murray Cleland, principal of Whangamata Real Estate.
He said the settlements of Onemana and Whiritoa had benefited from the high prices and market interest in Whangamata.
Gordon Turner, owner of First National Paradise Coast, said Covid is having it’s “little dibble” on the market.
“We had a very poor turnout to open homes the last two weekends. People go ‘oh it’s too hard, we won’t be able to get to that bach’ — some of that starts to play into their thinking — whereas they were all fired up before.”
Thames-coromandel mayor Sandra Goudie says while it’s a little easier for us in the Coromandel to look over the fence and think how lucky we are that we’rex not in the same position, only one transaction or meeting with someone that doesn’t get reported could turn into the same situation here.
“Which is why we also continue to stress the importance of contact tracing and staying home if you feel unwell, and following Ministry of Health guidance.”
The US economy is in pretty good shape at the moment. A number of indicators we’ve seen over the past fortnight confirm this, while the latest Covid-19 support package is set to provide a hefty boost to activity levels.
The monthly Institute of Supply Management (ISM) index is a monthly survey that reflects the strength of the manufacturing sector, and it’s a good indicator of the economy overall.
It was very strong in February, rising to 60.8, ahead of expectations and well above the breakeven-level of 50. That was the strongest print for the ISM since May 2004, and before that we need to go all the way back to December 1987 to find a higher reading.
The February jobs report was also better than expected, with 379,000 jobs created, above market forecasts. That saw the US unemployment rate fall to 6.2 per cent, the lowest since March 2020.
That’s still well below the 50-year low of 3.5 per cent from the beginning of last year, but it’s a whole lot better than the 14.8 per cent that prevailed back in April.
Having said that, main street America is still facing challenges, and many parts of the economy require ongoing support.
The National Federation of Independent Business released its monthly survey last week. Its measure of small business optimism is improving, having risen to 95.8 in February.
However, that’s still some way down from the average of almost 105 that prevailed for the three years leading up to March last year.
Despite the mixed picture in places, US economic growth in the March quarter should be impressive when we see the first estimate of GDP released at the end of April.
The next quarter could also look buoyant, with increased stimulus, a gradual reopening of the economy and the vaccine programme all set to ramp up over the coming weeks.
On the immediate horizon, we have the next round of stimulus looming. Senate Democrats passed the long-awaited US$1.9 trillion Covid19 relief package last Saturday, and the bill went to the House of Representatives for approval this week.
It is hoped this will be soon sent to President Joe Biden for his signature, ahead of the March 14 deadline to renew existing unemployment aid programmes. The new package includes direct payments of up to $1400 for most Americans and a $300 per week increase to jobless benefits.
The latter is smaller than the $400 per week that was originally planned, although these will now last slightly longer, running until early September.
The US is also doing well getting Covid-19 under control. Almost 30 per cent of the population has been vaccinated already, new cases of the virus have fallen 80 per cent compared with January levels, and the hospitalisation rate is at its lowest since October.
This should all ensure a steady stream of positive developments on the reopening front. As an example, during the past few days, Texas (which is the second most populous US state) has allowed businesses to reopen at full capacity.
America remains the biggest economy in the world, and it is home to some of the world’s largest companies. It is also our third biggest export market (behind China and Australia), taking a little more than 11 per cent of New Zealand’s merchandise.
For the world to recover from the events of last year, it needs to be led by a strong US, so let’s hope this good news continues in the months ahead.