Working together

Trust Tairawhiti chief executive Gavin Murphy. Gisborne Herald file picture by Paul Rickard

The primary sector has been hailed as the main reason Tairawhiti is so far dodging the worst of the economic fall-out from Covid-19 restrictions.

Tairawhiti has avoided the major downturns felt in other regional economies, new data shows.

Regional economy research supplied to Trust Tairawhiti by Infometrics shows activity in the June 2020 quarter was down 8.3 percent compared with the same quarter in 2019 — the smallest regional contraction across the country.

Trust Tairawhiti commercial general manager Richard Searle said the region's strong primary sector and the small size of the international tourism sector was helping shield Tairawhiti from the worst effects of the economic downturn.

“Meat exports nationally rose 0.4 percent per annum in the June quarter, even as forestry exports, another major economic contributor in Tairawhiti, saw a decline,” said Mr Searle.

“We are also seeing the strength of regional collaboration with the Tairawhiti Economic Action Plan (TEAP) and Rau Tipu Rau Ora recovery plan bringing together regional leaders.

“As a collective, we are sharing information and working together to achieve a best-for-region response.”

Unemployment in Tairawhiti was at 6.3 percent in June 2020, compared with 6.4 percent in June 2019.

This was similar to the national picture, where unemployment was down but so was the number of people employed, due to lockdown conditions.

Further estimates provided to The Gisborne Herald by Stats NZ show at the end of June 1600 fewer people were employed compared to the end of March, and 2500 fewer than at the same time last year when 26,700 people were estimated to be employed.

The figures, which Stats NZ said should be treated as indicative, also show the labour force participation fell from 74 percent in March to 71.9 percent at the end of June.

Stats NZ could not say the number of people unemployed or provide an unemployment rate for Gisborne due to the low number of people surveyed.

However, Ministry of Social Development figures show that in June 2867 people here were in receipt of a Jobseeker unemployment benefit.

Mr Searle said while unemployment trended lower, Tairawhiti continued to be one of the regions with the highest unemployment rate in the country.

“The challenge remains to transition our unemployed into job opportunities through the training, development, and workplace support initiatives that are co-ordinated within TEAP, and in partnership with industry groups.”

Trust Tairawhiti tourism general manager Adam Hughes was pleased to see household card spending growth in Tairawhiti was the highest nationally — 3.4 percent up compared with the national average of -2.8 percent.

“This shows underlying consumer confidence. Our communities are continuing to spend and support local businesses. We have also seen strong domestic visitor numbers which has restarted the local visitor industry in a traditionally quiet winter season for Tairawhiti.”

Trust Tairawhiti chief executive Gavin Murphy said an annual average house price increase of 23 percent over the previous year was significant, presenting a further challenge to housing affordability in Tairawhiti.

“This increase reinforces the need to continue to prioritise the Tairawhiti Housing Strategy co-led by Manaaki Tairawhiti and Trust Tairawhiti.”

Mr Murphy said the strategy (available on both organisations' websites) indicates a shortage of 400 homes.

“A strong and resilient economy has the potential to boost demand for housing and place further demand on our significant housing supply challenges.

“The Tairawhiti Housing Strategy provides details regarding the types of houses required, including short-versus-long-term requirements.

“We continue to work with Manaaki Tairawhiti to drive this forward and will be holding a housing developers hui with a range of developers we have already engaged.”

Trust Tairawhiti leads the economic actions in Rau Tipu Rau Ora. The trust is in daily contact with recovery plan partners to ensure the broader aspirations of health, whanau and community, environment and workforce are aligned, and communities are receiving consistent messages.

“We know the impact of Covid-19 will continue to challenge our local economy for some time. By working together we give ourselves the best chance of maintaining our resilience. If any local businesses and workers would like to discuss their situation, please contact Trust Tairawhiti,” Mr Murphy said.

Gisborne Chamber of Commerce president Paul Naske said while there were some concerns regarding the employment numbers, on the ground, businesses were once again showing confidence.

“We know anecdotally that the economy in the region is still vibrant and strong and it is very encouraging to see this reflected in the numbers from Infometrics.

“The job loss number is a real concern, though, and something for us as region to keep an eye on — especially considering it is not taking into account the upcoming end of the wage subsidy programe and mortgage holidays.”

However, an ongoing chamber survey of Gisborne construction and trades so far had shown “all of them want more staff”, Mr Naske said.

Infometrics senior economist Brad Olsen said not all regions had felt the economic effects of the pandemic equally.

The Otago region took the hardest hit to economic activity, with a 15.6 percent per annum drop as the collapse in tourism activity hit a number of local economies.

Meanwhile, the Manawatu-Whanganui and Gisborne regions weathered the storm as well as could be expected, with economic activity falling by less than 9 percent per annum.

“The structure of local economies is key to deciphering how the economic hit will reverberate throughout the New Zealand economy,” Mr Olsen said.

“Those local economies with a strong tourism focus have seen a deeper hit to activity, and those with a greater economic focus on international tourism will feel the prolonged effects of the downturn.

“Those local economies with a strong primary sector, particularly in food production, have held up better as New Zealand's exports continue to feed the world.

“Combining these various effects has resulted in a scattered regional economic picture.”

“Regional economies have taken a battering from the pandemic but local leaders, businesses, and communities have shown incredible resilience to get their areas moving ahead.

“Rapid deployment of support and strong local co-ordination has meant regional economies have responded immediately to get the economy moving again, with a focus on building the economy back better.

“The June 2020 quarter likely represents the largest single hit to the New Zealand economy on record, but the economic scarring and restructuring will continue to occur over the coming years. New Zealand is not out of the woods yet.”