Lockdowns ‘costing $240m a week’

The level 3 lockdown in Auckland and the level 2 alert in the rest of the country will cost New Zealand about $240 million a week, according to a ‘‘back of the envelope’’ calculation by ASB.

The bank’s chief economist, Nick Tuffley, said its estimate could be ‘‘well off the mark’’ but said it highlighted the value in spending money ‘‘to ensure the right people isolate appropriately and are supported while they make a sacrifice for the wider community’’. The calculation did not account for any ‘‘catch-up activity after lockdown conditions get loosened’’, he said.

ASB said the lockdown was likely to have a proportionately larger impact than the one in midFebruary, as it already included parts of two weekends. ‘‘It is the services sector – particularly hospitality and events – that bears the brunt of the impact, even if contactless sales do enable some venues to open during people’s leisure time,’’ the bank said.

BNZ said it was ‘‘a waste of time’’ trying to put numbers on the economic impact of the current restrictions because the range of scenarios was so wide.

‘‘But we can say with some certainty that the impact is negative.

‘‘In particular, for some businesses this might be the straw that breaks the camel’s back.’’

The bank said ‘‘a realistic bestcase scenario’’ was that Auckland would move down to level 2 next weekend and the remainder of the country into level 1. ‘‘A worst-case scenario does not bear pondering,’’ the bank said.

Westpac said the higher alert levels would impact many businesses but forecast they ‘‘would not have much impact on the overall economic outlook’’.

‘‘Many individual businesses will find this tough but the big lesson from the economic data last year was that levels 3 and 2 had only a small impact on overall economic activity,’’ it said.

‘‘The reason is that a good portion of the economic activity ‘lost’ during a lockdown gets made up for soon afterward.’’

Westpac said the alerts were unlikely to change its economic forecasts ‘‘unless the alert level is raised further or it extends for much longer’’.

Business NZ and the Council of Trade Unions issued a rare joint statement yesterday calling on ‘‘workplaces’’ to step up in their response to the outbreak.

BusinessNZ chief executive Kirk Hope said it was essential anyone identified as a Covid contact stayed away from work and isolated.

‘‘A worst-case scenario does not bear pondering.’’ ASB