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HomeNEWSChristchurch economy endures Covid-19 impact, but experts warn of dire outlook

Christchurch economy endures Covid-19 impact, but experts warn of dire outlook

Business leaders in Christchurch warn the worst of the economic fallout from Covid-19 is yet to come, but believe the city is better placed to weather the storm compared to other parts of the country.

Early estimates suggest there could be between 9000 and 36,500 job losses in the city over the coming year, with pre-Covid-19 unemployment numbers at 8600.

Property investor Richard Peebles said the city was now in the eye of the storm and job losses would start mounting, mainly in the tourism, hospitality and retail sectors.

“We know a lot of people are hanging on to their workers but whether they can do so when the wage subsidy ends, I would doubt it. So I think you’ll find that once the subsidies end, there will be a big wave of unemployment, big spike,” he said.

However, Peebles said the city may get off comparatively lightly from the ongoing border closure.

“Our tourism numbers – it only just got back to where they were pre-earthquake just before the lockdown. So we didn’t have a mess of number of overseas tourists,” he said.

The statistics do not paint a rosy picture however.

Recent job cuts included 49 at council-owned events company Vbase.

Unemployment crept up by 0.1 percent to 4.2 percent in the first quarter compared with the same time in 2019. But unemployment numbers were expected to rise, according to economic development agency ChristchurchNZ.

Visitor spending was also down 7.4 percent and retail spending in the central city was down 3.6 percent compared with quarter one in 2019.

Canterbury Employers’ Chamber of Commerce chief executive Leeann Watson emphasised the blow on businesses relying on that visitor spend.

“We shouldn’t underestimate that many businesses are still not operating at full trading conditions. And that will take some time for that to return, particularly if they are reliant on the borders opening,” she said.

Ballooning Canterbury chief executive Michael Oakley said demand in the tourism sector was still low since he restarted this month, and he would have to reduce operations.

He believed Christchurch and Canterbury were better placed than areas which were more reliant on international tourism, however.

“I think Christchurch is in a pretty good place. Before, about 60 percent of our business was overseas tourists and 40 percent was local. So we’re pretty lucky that we weren’t up around that 80-90 percent relying on the tourists’ overseas dollar,” Oakley said.

One cafe in New Brighton had the misfortune of opening up the week before New Zealand went into lockdown in March.

Despite the setback, Green Bear Cafe owner Mandy Arnett said the business was performing well.

“It’s definitely been going better than we thought, it has slowed down a little bit now that people are back to work, and the subsidy has finished for a lot of people as well,” she said.

“Some people obviously are out of work, unfortunately. So that expendable cash that people kind of had to buy the odd coffee here and there just isn’t quite there the same.”

In order to improve the local economy, businessman Peebles urged the government to look at easing border restrictions to alleviate short-term pain.

“We need a tourism bubble, whether it be Australia, China, Hong Kong, Singapore. That’s what we need to do, and we need to do that as soon as possible and without that, our economic outlook is going to be very dire,” he said.

Peebles said Christchurch would in the long term be well placed thanks to rebuild projects such as the Convention Centre, Metro Sports Facility and a new stadium, all due to be completed in the next four years.

This story originally appeared on www.rnz.co.nz

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