More than 75% of Hawke's Bay back at work, but uncertain times ahead

Many people are back at work but city centres are still a little quite as shopping moves online. Photo / Paul Taylor

More than three-quarters of Hawke's Bay is now back at work under level 3 restrictions.

The latest Infometrics report shows the move to level 3 saw 78 per cent of Hawke's Bay's workforce back on the job, although safe work practices have continued to impact productivity.

As a food producing and processing region, Hawke's Bay will have slightly less exposure to the Covid-19 recession than the rest of New Zealand, but with no significant rain for months, the drought is hitting hard, the report states.

Central Hawke's Bay saw the biggest portion of its workforce getting back to work with 85 per cent and Wairoa being 83 per cent, but being forestry and agricultural regions they are able to do so.

Hastings and Napier are taking bigger hits - 79 per cent are back to work in Hastings and in Napier 73 per cent - as they have larger retail and hospitality sectors that provide a big portion of employment.

Just a few months ago, Hawke's Bay's economy was riding high but is set to take a significant dip like the rest of the country, Business Hawke's Bay chief executive Carolyn Neville said.

"Now we are staring down the barrel of significant job losses, business failures, a large decline in regional GDP and lot of uncertainty," she said.

"Lockdown has forced, or in some cases, accelerated innovation, so that businesses can trade."

Employment is expected to shrink by 7000 jobs, from 83,600 to 76,600, in the next year, with low income households at the highest risk of job losses, Neville said.

"Employment is expected to decline by 8.3 per cent in the year to March 2021.

"Most of the job losses are expected in Napier City and Hastings District as those economies are the largest and will contract the most."

Napier City Business is looking to help out many of Napier's retail and hospitality stores that have shifted online by offering a one way website connecting shoppers to all their favourite stores.

Business Hawke's Bay chief executive Carolyn Neville said that the region's economy was riding high but is set to take a significant dip. Photo / File

Rob Heyes, senior economist at Infometrics, said Hawke's Bay job losses by skill level align with the expected declines by occupation.

But Hawke's Bay is sitting in a better place to weather the storm than other regions, with Infometrics predicting a 6.2 per cent decline in regional GDP, compared to 8 per cent nationally.

CHB and Wairoa economies are expected to contract the least; -3.8 per cent and -4.4 per cent respectively in the year to March 2021.

Hastings District is expected to contract by -6.1 per cent and Napier is expected to fare the worst, at -7.2 per cent.

CHB and Wairoa will benefit from strong primary and food manufacturing sectors, which are expected to continue growing.

But Central Hawke's Bay faces a double whammy of Covid-19 and drought, with the drought a big downside risk to Infometrics forecast for the region.

Neville said the mindset of business owners moving forward will be "critical" because the months and years ahead will be very tough.

"Staying positive, being able to adapt, and to see opportunity where others might see obstacles will be key to getting through the immediate impacts of Covid-19 and the recession that follows.

"We all have a part to play in the recovery. We all need to 'go local' and support the businesses and organisations that support our livelihoods and our way of life," Neville said.

"There are hard yards in front of us, but eventually the resilience of our local economy, the productivity of our region, and the guts and passion of our people and our innovative business community will pull us through."