New Zealand Businesses Continue to Feel the Effects of COVID-19
Businesses in New Zealand are still experiencing the effects of covid-19. In fact, health officials are issuing higher alerts this month than those issued last March when the virus first began to make waves across the globe. Many smaller businesses have shut down completely while larger chains have restricted access to indoor areas where crowds might gather.
One of the few industries that have continued to work is construction. Though things are moving much slower than normal, projects are getting completed. Economists are saying that this may be the new norm for the foreseeable future.
Level 2 Restrictions
At the moment, Auckland and the rest of the country is at the Level 2 alert. These new actions taken by the government come after the discovery that the virus was being spread at higher rates in areas where businesses have tried to open back up.
Recently, Infometrics released its quarterly economic monitor. It highlights a substantial economic decline as New Zealand struggles to eliminate the virus. Health officials are hoping to have the virus under control by the end of the year so that life can return to normal for citizens.
The Lockdown: Costly for Everyone
Senior economist Brad Olsen states that though businesses are under level 2 restrictions, some are operating more closely to level 2.5 restrictions. He notes that it’s difficult to gage and control this. Many economists believe that if businesses are kept at level 3 restrictions for an extended period, it could cost $450 million weekly. Around the world, the news is about the same though.
Most countries are reporting sluggish economic figures except for big chains that offer 2-day shipping or same-day deliver. Since many people are still staying at home, observing the lockdown, businesses that deliver seem to be faring better than others.
Vaccine Trials Could Come Soon
Sadly, many economists believe that job losses and business failures will continue on for a few months. Some believe that things will not return to normal until a coronavirus vaccine is created. USA Today is reporting that vaccine trials for covid-19 could come as soon as November.
Adapting for the Future
Senior economist Brad Olsen had a few suggestions and observations: “Figuring out different ways of operating become important. The immediate economic ramifications vary by region and the end results are clear to see – economic activity has fallen in all regions, nearly 50,000 Kiwis have lost their jobs, businesses have struggled to cope with lower earnings, and incomes were reduced,” Olsen said.
Travel Industry Hit Hard
In New Zealand and around the world, the travel and tourism sector has been the hardest hit. Major airlines are struggling to stay afloat. In spite of offering very low fees for flights, most commercial jets have been grounded. Those that are flying typically have only a few patrons on board.
Olsen comments: “We need to be realistic, it’s not going to be the same… we have lost $17 billion in international tourism.” He also said that, “Infometrics currently expects that economic activity was down 12.6 per cent per annum in the June 2020 quarter, as the economy endured a dramatic shift in focus, from life support at level 4 to an adrenaline rush at level 1 over the three-month period.”
How Long Will Lockdown Continue?
He reminds us that the health of local businesses is usually a good barometer of how the nation’s economic health is doing. He believes that New Zealanders are resilient people who will survive regardless, but that it is important to get the economy moving forward again. Olsen and other officials in New Zealand believe that it’s wise to keep the borders closed.
As conditions improve, it may be possible to gradually reopen the borders. He cautions that regardless of whether the borders are open, it’s unlikely that there will be a rush of tourists visiting New Zealand in the foreseeable future. The world is only now beginning to realise that it will take more time for a full recovery.