Water restrictions bad for business

David Norman is no meteorologist or water expert, but knows when the city is in deep water.

The chief economist has been working with Watercare to understand what the severe drought and water restrictions mean for business and jobs if things don’t improve.

Norman has calculated 1000 jobs in the car wash and water blasting industries are already affected by the drought and on very early estimates between 6000 and 14,000 jobs could be affected over summer.

These numbers are conservative because they only cover a couple manufacturing sectors, food and beverage, and glass/concrete/ plastics/metal. They also include car washers and water blasters.

He has still to consider the impact on hotels, cafes, restaurants and office blocks, which might not be able to operate fully or at all under tighter restrictions.

Under an alert system set up by Watercare there are four stages of restrictions based on falling lake water storage levels.

Auckland is currently in Stage 1 with no water savings required by business. Under Stages 2, 3 and 4, businesses must cut water use by between 10 per cent and 30 per cent.

Under these restrictions, said Norman, major water users would have to cut production by between 14 per cent and 40 per cent with a midpoint of about 20 per cent.

Norman has been having confidential meetings with major water users over the past week to try to understand what a 14 per cent to 40 per cent cut would mean for production.

Some companies have already reduced water usage and believed they could manage shifts and potentially go down to a four-day week.

“Others have said anywhere from 15 per cent to 30 per cent of their workforce would lose their jobs,” he said.

Norman said the water restrictions would also affect manufacturers’ supply chains, not just in Auckland but the rest of the country.

— Bernard Orsman