Virus may blitz 12,400 jobs in city

Most small firms unable to ‘ride out two-year recovery’

More than 12,000 innercity Auckland jobs could be axed and $3.1 billion of GDP lost by March 2021 in the ongoing Covid-19 pandemic fallout.

According to a new economic report by consultancy Strateg.Ease, released by Auckland business association Heart of the City, even a quick exit from level 3 is unlikely to soften the blow for central-city businesses.

Heart of the City chief executive Viv Beck said more than 12,400 Aucklanders could lose their jobs and it would take at least two years for those areas hit to recover.

“Tourism, hospitality, entertainment, arts and culture, and retail — the businesses that give the heart of our city its vitality and distinct character are amongst the worst affected,” she said. “The impact of losing international tourists, students and events took an early toll on these businesses and this was compounded by people working from home.”

And at alert level 2, the large-scale loss of customers would continue to have a “severe impact” on these businesses: “The drivers of a dense, busy city centre have now become major risks that need well-considered actions to address.”

Economic activity ( GDP) could drop by more than $3.1b by next March — significantly worse than during the global financial crisis of 2007-08 when jobs fell by 4400.

While a lot of city-based businesses were able to operate under level 3, that wasn’t the case for hospitality and tourism businesses, Beck said.

“For those businesses, there is little appreciable difference between levels 3 and 4. And for many, level 2 will have ongoing restrictions that impact their viability due to physical distancing and a lot less customers.”

These small businesses had offered much appeal to thousands of workers, students, visitors and residents every day before the pandemic.

Beck urged local and central government to prove they were serious about economic recovery post-Covid and supporting the thousands working in inner-city centres.

“We need a collaborative and sustainable approach to support our small businesses to ensure we have a vibrant city centre to showcase with America’s Cup and Apec still scheduled . . . The same principle should apply to other areas raising specific needs. One solution does not fit all.”

Most small businesses lacked the reserves to ride out a two-year recovery or pivot to a new operating model.