July 17, 2020

Infometrics: COVID impact on Whanganui economy softer than elsewhere

Infometrics: COVID impact on Whanganui economy softer than elsewhere
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Infometrics Senior Economist Brad Olsen says Whanganui has emerged as one of the best districts in New Zealand in terms of weathering the economic impact of COVID-19.

Olsen presented his insights and analysis to Whanganui District Councillors, Whanganui & Partners and business leaders in a webinar facilitated by Whanganui & Partners. He highlighted a number of indicators pointing to a relatively soft hit to the local economy.

“Although it hasn’t been an easy ride, and businesses in the local area will be feeling the pinch, it has been better than we might have expected and certainly better than the rest of New Zealand experienced,” Olsen said.

He pointed to Whanganui consumer spend, which took a hit during lockdown but held up at a considerably better level than most of the country. Similarly, employment in Whanganui has been affected at a lower level than elsewhere in New Zealand. Of the country’s 67 districts, Whanganui has had the third smallest increase of people on the Jobseeker Support benefit.

Newly released house price data from REINZ was also positive, with the median price up 25% from last June.

“That highlights the strong economy and that people are looking to move to the area or regard Whanganui as a firm place to plant themselves and their families,” Olsen said.

As for the future, Olsen said that New Zealand is still in the early stages of the economic hit. He noted that there is still economic buffering in place through the Wage Subsidy and COVID-19 Income Relief Payment programmes. Both programmes are set to expire in September.

He also noted the challenges posed by an interconnected global economy.

“New Zealand might be doing alight, and China might be doing alright, but if China’s trading partners in the US and Europe aren’t doing alright, eventually that feedback loop does come back to bite us too.”

Overall, Olsen says that Infometrics is anticipating a U-shaped recovery lasting over the next three and a half to four years.

“We’re certainly not out of the woods, but things are brighter than expected.”

You can watch the webinar here.

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