Timaru well-equipped for Covid-19 shock, says economist

A leading economist says the Timaru District is better poised than most places to ride out the wave of economic hardship that Covid-19 will bring.

Infometrics senior economist Brad Olsen said although most sectors of the economy would be experiencing “a world of pain” over the coming few months and even years, he expected Timaru’s strong primary produce sector would be one of the reasons the place would hold up better than others.

“Our last modelling had the unemployment rate in Timaru District at 3.2 per cent over the year to March 2020, which is significantly lower than the national average of 4.1 per cent,” Olsen said.

“I expect the unemployment figure to rise in Timaru, but it’s coming off a low bar.

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“Timaru has strong activity across a number of sectors, particularly when it comes to horticulture and primary produce. All of those are going to keep the economy going through the tough times.”

Olsen said there would be a second wave of redundancies across the country and including Timaru over the next few months, but the “real pain” probably would not happen until the wage subsidy extension runs out in September.

“That’s when you will see some really big shocks, and there’s still a lot of water to go under the bridge,” he said.

In terms of tourism, Olsen said Timaru District was ironically, quite well-placed, as it did not rely on international tourism as much as regions such as the Mackenzie District.

“Timaru already has a domestic focus on its tourism, whereas Mackenzie District will not be able to as easily recoup the losses of the international market,” Olsen said.

“That said, this provides an opportunity for domestic tourists, particularly those from the North Island, to really experience the attractions of the South Island. It’s not going to be able to recover the entire tourism spend, but it will lead to some strong activity.”

Olsen spoke to the Timaru District Re-ignition Committee last week about the likely effects of Covid-19 on the local economy.

It was the first meeting of the committee which has been established to develop a reignition strategy for the district over the next four weeks. The strategy will outline objectives and actions to enable all communities within the district to recover and prosper in a post Covid-19 world.

The panel consists of representatives of industry, the rural economy, iwi, youth, social services and council.

It includes: Mayor Nigel Bowen, Gary Rooney, Grace Scarsbrook, Liz Nolan, Peter Burt, William Rolleston, Karl Jackson, Nicky Donkers, Keith Shaw and Nigel Davenport. Aoraki Development is acting as secretariat for the panel with additional support from Timaru District Council staff as part of its civil defence recovery function.

Bowen said the committee also discussed a number of current and anticipated areas which will help inform the preparation of the reignition strategy.

“Timaru District is an amazing place to call home, and we have the right fundamentals in place to weather this storm,” he said.

“This panel will work to ensure that we all align our efforts to ensure we continue to grow and thrive in this changed world.”