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SIMON O’CONNOR / THINGS
New Plymouth Mayor Neil Holdom says a new report on the impact of the Covid crisis on the Taranaki economy is a terrible read. (file photo)
The coronavirus crisis is expected to have the biggest impact on living memory in Taranaki’s economy and send unemployment through the roof, a new report predicts.
Commissioned by Venture Taranaki and the New Plymouth District Council, the report, released Thursday by economists Infometrics, anticipates an 8.5% contraction in regional GDP for the year through March 2021.
This is slightly worse than the 8.0% drop forecast nationally.
Jobs in the region are expected to decline 9.5 percent compared to a 9.8 percent decline nationwide.
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Venture Taranaki CEO Justine Gilliland believes the region’s strong food production industry would provide the economic backbone for recovery and future growth after the Covid crisis. (file photo)
An estimated 5,500 jobs will be lost over the next 12 months, more than nine percent of the workforce, resulting in a $ 312 million drop in wages paid in the region, and unemployment is forecast to reach more than 10 percent.
The housing, food service, retail and wholesale, transportation, postal and warehousing sectors were expected to be the hardest hit, and more than 500 jobs in the construction industry are also expected to be lost.
But it’s not all doom and gloom, with potential recovery opportunities including non-residential construction projects, particularly the redevelopment of the $ 300 million Maunga Taranaki Project Base Hospital, which is touted as a lifeline for the construction and regional economy.
New Plymouth District Council Mayor Neil Holdom said the document should be direct reading and the response should be a coordinated approach by the Taranaki Team to soften the impact and minimize financial damage, while creating a platform for growth that followed an economic downturn.
“We can thank our farming community for things that haven’t gotten much worse, so let’s start from there, determining how we can help food producers make more profit from their current production, since they are clearly the main income from New Zealand, “Holdom said.
Venture Taranaki CEO Justine Gilliland said the region’s main pillars of the economy, energy and food production, were expected to experience a mixed fortune.
There was a significant drop in oil prices and, combined with Covid-19, the energy sector is forecast to suffer the greatest impact in terms of GDP, while food production and exports remained strong, which was expected to continue.
“Taranaki has a strong food production industry, which represents a significant proportion of our GDP and jobs,” said Gilliland.
“This economic backbone will play a critical role in our economic recovery and future growth.”
She said that the region was also less exposed than others to the fall of international tourism, while its participation in the domestic market was stronger.
Data from the Ministry of Business Innovation and Employment showed that visitors to the region spent $ 429 million for the year ending in January 2020, and national tourism represents 78% or $ 334 million.
“While this may offer little comfort to tour operators in our region, it sends a more positive signal of recovery once domestic travel is safe and permissible,” said Gilliland.
During alert level four, 56 percent of the Taranaki workforce was able to work, while 77 percent would likely return to level 3. This is better than the national rates of 53 percent and 74 percent, respectively .
Holdom said it was an opportunity for the government to determine what investments it should make to help transform the national and local economy.
He believed a prudent approach would be to allocate an initial pool of $ 10- $ 15 billion to develop the education, food production and energy sectors along with public infrastructure and a focus on building asset types to underpin a transformation. of the Aotearoa economy in the position Covid-19 world.
“Our children will have to pay for all of this, so there must be a strong focus on educating our people to retrain and develop, a focus on increasing the profitability of our food production sector in a sustainable way, on investing in energy with less carbon and in essential public infrastructure such as water to shore up the future needs of the unborn kiwis, all the opportunities that can be developed in Taranaki. “
