Covid and drought delivering one of the 'greatest economic shocks' to Hawke's Bay

A dried up dam in Raukawa, Hawke's Bay, in April. Photo / Paul Taylor

The Covid-19 pandemic combined with a continuing drought has delivered "one of the greatest economic shocks Hawke's Bay has seen", a new report shows.

But the report also shows there's light at the end of the tunnel, if the region is smart in the way it reconstructs itself from the twin crises.

A total of 2200 more people are out of work in the region compared to this time last year, with 67 per cent of work-ready job seekers Māori and Pacific.

That's despite $330m being paid in wage subsidies across Hawke's Bay since the subsidy's level 4 lockdown inception.

A total of $330m has been paid in wage subsidies across Hawke's Bay throughout the ongoing Covid-19 pandemic. Photo / File

The full extent of the economic impact the pandemic and the drought have had on the region was highlighted in the new Regional Economic Recovery, presented to Hawke's Bay Regional Council's corporate and strategic committee on Wednesday.

Author of the report, regional recovery manager Sarah Tully, said the two had caused "one of the greatest economic shocks Hawke's Bay has seen".

Throughout Covid-19, $330m has been paid in wage subsidies, with 52 per cent of jobs covered in the first payment and 10 per cent in the extension.

HBRC has supported 728 local businesses with $1.5m of assistance under the Regional Business Partners programme, while the drought has caused 187 farmers to use feed transport relief, 333 small lifestyle block recipients of feed runs and 143 to request feed budgeting assistance.

Tully said like the rest of the country, Hawke's Bay's GDP, impacted by reduced visitor numbers and spend, is forecast to contract further.

"Job seeker numbers are up 58 per cent versus this time last year and there's been a significant increase in income relief payments, accommodation supplement support and special food grants in July 2020," she said.

"There's concern around the flow-on impacts from water and feed shortages and low stock numbers combined with global uncertainty influencing commodity prices."

HBRC chief executive James Palmer said the council is focused on driving projects to stimulate economic activity and capitalise on the current Government funding pool.

"Regional council has so far been awarded $20.7m funding toward recovery projects, with another $10.6m currently pending.

"We're also supporting Business Hawke's Bay and Hawke's Bay Tourism through their on the ground recovery activities."

Tully said while the resurgence of Covid-19 has caused angst across businesses and the community, Hawke's Bay is in a better position for economic recovery than some regions, with a high performing food and fibre industry and booming construction sector.

"Workforce planning and right training for labour requirements will be an integral part of recovery for the region," she said.

"There's a significant pipeline of capital projects and in more cases than not the issue is filling jobs not creating them.

"Adapting between response and recovery moving forward is key, with a focus on building resilience and thriving in a 'new normal'."