Covid 19 coronavirus: More than 12,000 Auckland city-centre jobs could be lost by 2021, new report says

More than 12,000 jobs could be axed in Auckland's centre and $3.1 billion of gross domestic product (GDP) lost in the ongoing fallout from the Covid-19 pandemic.

According to a new economic report by economist Strateg.Ease, released by business association Heart of the City, even a quick exit from level 3 could be dire for central Auckland businesses.

Heart of the City chief executive Viv Beck said more than 12,400 Aucklanders could lose their jobs and it would take at least two years for businesses to get back to where they were before the pandemic.

"Tourism, hospitality, entertainment, arts and culture, and retail - the businesses that give the heart of our city its vitality and distinct character - are among the worst affected," she said.

"The impact of losing international tourists, students and events took an early toll on these businesses and this was compounded by people working from home."

And when New Zealand moves to alert level 2, the large-scale loss of customers will continue to have a "severe impact" on these businesses, Beck said.

"The drivers of a dense, busy city centre have now become major risks that need well-considered actions to address."

Economic activity (GDP) could drop by more than $3.1 billion by March next year, significantly worse than the global financial crisis of 2007-8, when 4400 jobs were lost, the report showed.

While a lot of city-based businesses were able to operate under level 3, that wasn't the case for hospitality and tourism businesses, Beck said.

"For those businesses, there is little appreciable difference between levels 3 and 4. And for many, level 2 will have ongoing restrictions that impact their viability due to physical distancing and a lot fewer customers.

A new report forecasts dire results for Auckland central businesses post coronavirus. Photo / File

"These are the small businesses that offered so much appeal to thousands of workers, students, visitors and residents every day before the pandemic struck," she said.

Beck urged local and central government to prove they were serious about economic recovery post-Covid and the thousands of people whose jobs were at risk.

"We need a collaborative and sustainable approach to support our small businesses to ensure we have a vibrant city centre to showcase with the America's Cup and Apec [the Asia-Pacific Economic Co-operation summit] still scheduled for next year.

"The same principle should apply to other areas raising specific needs. One solution does not fit all."

Most small businesses didn't have the reserves to ride out a two-year recovery process or to automatically pivot to a new offer and operating model, Beck said.

"Many are already struggling due to the impact on revenue of construction work and other changes the city has gone through over the past few years. We recognise the long-term benefits of these projects, in the same way we recognise the public health imperatives with Covid-19.

"But our small businesses are bearing a disproportionate share of the cost of these initiatives with insufficient support offered to date to address cashflow issues."

• Covid19.govt.nz: The Government's official Covid-19 advisory website