Economic experts will be keeping one eye on the kiwifruit sector. Photo / NZME
Economic experts will be keeping one eye on the kiwifruit sector. Photo / NZME
Bay of Plenty's economic confidence was battered by the latest lockdown and is now hanging on by a "whisker", a new survey shows.
Local experts say confidence is tracking down and no one is safe from the challenges of staff shortages, supply chain issues and recurring lockdowns.
However, they sayachieving a 90 per cent vaccination rate, vaccination passports and opening borders will help rebuild confidence.
The Westpac McDermott Miller Regional Economic Confidence survey for the September quarter showed confidence slid eight points to a net one per cent of households feeling optimistic about the region's economic prospects.
Westpac acting chief economist Michael Gordon said confidence in the region's economic prospects remained positive, on balance, in the September quarter, "but only by a whisker".
"The lockdown likely explains most of this drop, however, forestry prices slipped from their record highs over the quarter, so this move may have also been a factor in the decline.
"The region remains on sound economic footing, and we expect confidence to rebound over the remainder of the year.
Worker shortages remained a concern, particularly for the region's key kiwifruit sector."
Rotorua Chamber of Commerce chief executive Bryce Heard said business confidence was changing daily "but is on a downward pathway" without consistent rules or timelines from the central government.
"I do not think the business community has had to deal with so much uncertainty in my long career in business.
"Many businesses are not able to plan just one week ahead because the rules keep changing."
Heard said decisions made by businesses in response to Covid had serious and, for some, a terminal impact.
"Imagine if you are an events management business - how do you plan and deliver any event for a large number of people, in this environment?
"To restore business confidence, we must stop relying on government subsidies and hopeful thinking and put some firm durable rules in place to get the economy operating again.
"Vaccination visas might be a good place to start."
Red Stag Timber chief executive Marty Verry said forestry had come off the mid-year highs and the outlook for export logs was cloudy with stocks building up in China and on the water.
"Sawmills are in a sweet spot just now. The shutdown was only two weeks, and markets remain strong.
"Sawmilling is still on record highs."
However, he said there was likely some uncertainty about whether the government had the ability to transition to a world where Covid was endemic, or whether the lockdown strategy will continue.
"The closing of the borders will be worrying businesses because we desperately need labour and skills, tourism, as well as population growth to fuel Bay of Plenty businesses."
Red Stag Timber chief executive Marty Verry. Photo / Supplied
Verry said opening the borders and accepting Covid would circulate would motivate vaccination rates above the Government's 90 per cent target rate.
"The regions have been spared of Covid so people feel they don't need to get vaccinated. Only opening up will force the last 10 to 20 per cent to get the jab.
"I hope the government gets this, or we'll be waiting for months."
Tauranga Chamber of Commerce chief executive Matt Cowley said local business confidence was like "a seesaw".
"There are opportunities from continued population growth and strong exporter revenue but there are major challenges of labour shortages and further business disruptions.
"The region's strong primary sector has been the backbone of our local economic recovery since our first lockdown."
Tauranga Chamber of Commerce chief executive Matt Cowley. Photo / NZME
Cowley said many professional and service sectors benefited from the foreign revenue that exporters injected back into the economy.
However, nobody was safeguarded from the challenges of staff shortages, supply chain issues and threats of recurring Government lockdowns.
"It is also a vulnerable time of year for many small businesses - particularly hospitality and retail - who have endured the seasonally quiet winter months and are hopeful for a busy festive spending season."
Zespri director of external relations Michael Fox said the strong demand worldwide for kiwifruit was encouraging, however, the industry was facing headwinds with challenges like Covid-19, ongoing shipping disruptions and labour shortage concerns.
"The industry is working together to tackle the challenges so we can continue to get our fruit to the world and bring value back to New Zealand."
The survey was conducted from September 1 to 11, 2021.
Regional economic confidence* (net confidence %)
Northland
September 21: 4 June 21: -6 Change: 10
Auckland
September 21: -7 June 21: 10 Change: -17
Waikato
September 21: 7 June 21: 21 Change: -14
Bay of Plenty
September 21: 1 June 21: 9 Change: -8
Gisborne/Hawke's Bay
September 21: 18 June 21: 15 Change: 3
Taranaki/Manawatu-Whanganui
September 21: 11 June 21: 13 Change: -2
Wellington
September 21: 11 June 21: 11 Change: 0
Nelson/Marlborough/West Coast
September 21: 8 June 21: 11 Change: -3
Canterbury
September 21: 25 June 21: 5 Change: 20
Otago
September 21: -2 June 21: 10 Change: -12
Southland
September 21: 15 June 21: 13 Change: 2
Source: Westpac McDermott Miller Regional Economic Confidence survey
The 90% Project:
A high vaccination rate is vital to make our population safe from serious disease, keep our hospitals running and gradually allow our economy and border to open up to the world again.
So NZME titles, including the Bay of Plenty Times, Rotorua Daily Post and the NZ Herald, have joined forces to work for at least 90 per cent full vaccination against Covid-19 in our eligible population by Christmas.
