Grim economic forecast
Nearly one in 10 jobs in NelsonTasman are expected to be lost as the region recovers from the after-effects of Covid-19.
A recently released Infometrics report is predicting that along with job losses, Nelson’s economy is set to contract by 7.9 per cent, with transport, retail and accommodation the sectors to be hit the hardest.
Nelson Regional Development Agency chief executive Mark Rawson said the figures made for ‘‘sobering reading’’, but were important for people to know if there was going to be an honest conversation about the state of the region’s economy.
‘‘Our region has some significant competitive advantages that will help us navigate these changing times, but we need to be realistic about the storm we are facing and put ourselves in a position to respond accordingly.’’
The report stated during the Level 4 lockdown consumer spending in Nelson ‘‘fell off a cliff’’, dropping by 59 per cent in two weeks from March 26 to April 5. In the next 12 months, the Nelson-Tasman economy is predicted to decrease by 7.9 per cent, with earnings declining by $280 million.
The projected unemployment rate of 8.6 per cent is likely to mirror the national average (which is projected to be 9.0 per cent), and is expected to disproportionately affect low-skilled workers.
While the primary production and manufacturing sectors are expected to hold up well, the tourism sector, which accounts for 8 per cent of the region’s economy, would be hardest hit by the continued drop-off in international visitors.
This downturn would be most keenly felt within the accommodation and food services, retail trade and transportation industries.
The report was commissioned by the Nelson Regional Development Agency on behalf of Project Ko¯ kiri, a regional response group comprising local government, business leaders and iwi, who are working to lead the region’s economic restart and recovery planning.
Rawson said the report matched up with a lot of the anecdotal research carried out within different industry sectors in Nelson and Tasman.
He said a big focus for the recovery planning would be to target industry sectors such as fisheries, food and beverage, and forestry — which were expected to be affected less severely and recover quicker.
‘‘All those industries have a really long local supply chain; a large number of small to medium companies provide lots of services to those industry sectors.
‘‘We want to focus on how we can help those core industries accelerate their restart and recovery, because they will have the greatest impact on those businesses that feed into their supply chain.’’
Nelson mayor Rachel Reese said the first step to economic recovery was a clear picture of what the region was facing.
‘‘This report confirms that the people of Nelson are hurting and there is no quick fix to the financial challenges ahead for the region.’’
Tasman mayor Tim King said it was vital the region made the most of the advantages it had in some industry sectors.
‘‘Things will be different, we are going to have to work differently but this brings positive opportunities. Supporting local business and local industry will be important.’’