Counting the cost of lockdown

New retail spending figures have revealed just how hard the coronavirus lockdown has hit the Manawatu¯-whanganui economy.

As coronovirus spread around the world during the first three months of the year, Palmerston North City Council’s figures recorded a nearly $67 million fall in spending, compared to the start of last year, for the region’s worst-hit sectors: accommodation, hospitality, and apparel retail.

When all non-essential businesses closed for the lockdown in late March, retail spending went off a cliff.

Though amonetary figure capturing the economic consequences of the lockdown on the region was not yet available, the council’s economic policy adviser Peter Crawford said they had receivedmarket advice of a 60 per cent drop in spending across all sectors.

Crawford said the bulk of the pre-lockdown damage came from losing the Central District Field Days and the National Secondary School Volleyball Championships in March, tentpole events for the region lost when large gatherings were banned. In those three months, spending in the accommodation sector fell to $16.9m, 15.2 per cent down on the start of last year. Bars, cafes, and restaurants took in $36.3m, an 8.2 per cent drop.

Apparel sales took the second biggest hit of the pre-lockdown period, with people spending 12.1 per cent less on clothing than they did last year.

But it could have been worse since the other big March drawcards squeaked in before the events ban.

Crawford said the latest Marketview reports for Palmerston North showed how badly the lockdown had battered the city’s economy.

A week before it started, 16.5 per cent more money was spent than last year, likely fuelled by frenzied supermarket shopping.

The week it came into effect, people spent 19.5 per cent less, and in the first full week of lockdown, the spend was a huge 57 per cent down on the previous year’s figure.

Although that improved to a 40 per cent drop by the second week after limited trading was allowed under alert level 3.

Coronavirus also ended the region’s long streak of falling unemployment, that had been driven by the thriving agriculture and construction sectors, Crawford said.

Jobseeker numbers grew by 380 people a week on average during the lockdown, and by May 8 had reached 11,172.

Crawford expected a big spike in spending over the coming month, now that people have escaped their bubbles, before retail settles back into a more normal pattern.

‘‘Hopefully spending starts growing again ... [but] even getting back to the same as last year’s average for the next four months will be a good sign.’’