New report predicts the rise and fall of Marlborough’s post-Covid economy

More jobs have been created in Marlborough than have been lost following the coronavirus lockdown, reveals a new report.

But the good times after Covid are not expected to last, and the economy is expected to hit a low point sometime next year.

Infometrics senior economist Alistair Schorn presented his report at a public meeting at the Marlborough Convention Center in Blenheim on Tuesday.

The report showed that Marlborough’s economy was down 14.4 percent in June, compared to last June, but was up 1.4 percent in September from last year. Schorn attributed the recovery in part to consumer spending.

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The 14.4 percent drop in the region was the second worst in New Zealand, after Otago, which was still struggling.

Unemployment in Marlborough reached 2.6 percent in September, improving 0.2 percent from March before the close, after a small population increase helped create about 575 new jobs.

At the same time, around 520 people signed up for Jobseeker or Covid-19 financial aid payment support. Most of the lost jobs come from the arts, real estate, science or transportation sectors.

“When the blockade started, [Infometrics] they were predicting that the sky was going to fall. We are very happy that we are proven wrong, ”said Schorn.

But Marlborough was not out of the woods, he said.

The economy is projected to fall another 2.4% in the next two years, resulting in a $ 73 million cut from the region’s pocket.

With that came the prediction that 900 more jobs would be eliminated by next March, as unemployment in the region fell to 3.2 percent, about 5 percent better than initially expected. This would rise to 1,530 jobs, or 4.9 percent, by March 2022.

The next round of job cuts would come from the accommodation (590 jobs), agriculture (180 jobs), retail (160 jobs), and winemaking (155 jobs) sectors as they they emptied their wallets.

Maori and people under 30 are likely to be hit the hardest, reflecting the first round of losses, but Schorn said employment among Maori is expected to rebound faster.

Infometrics senior economist Brad Olsen said at the public meeting that recovering from this blow would not be quick.

“When you kick so many people out of a job, and let’s be clear, we’ve kicked out 70,000 jobs across the country so far, it takes time for those jobs to get renewed,” Olsen said.

But it was one thing to have jobs and another to fill them.

“It’s not as easy as putting the pool of job seekers into the pool of available jobs. We already had this problem before Covid-19 … Band-Aid’s solution has been to import foreign labor, and that has been the solution for 30 years.

“The struggle is that … we continue to ignore the question of how to get New Zealand residents to make these available jobs.”

Cafe Cortado CEO Kody North said Picton businesses were struggling to attract summer workers.

North said he found that New Zealanders did not view hospitality as a career, unlike other countries, and those who did often turned down low-skilled jobs, such as washing dishes.

“It has been difficult. Those that are applied adjust very quickly. Many have visas that require me to pay them $ 25.50 per hour to meet their visa requirements, ”North said.

The cafe wanted to hire three dishwashers and several more hands in its kitchen. He had adapted his hiring perspective to allow job seekers to come to him, rather than chasing job seekers.

Two-thirds of Marlborough’s longtime staff came from abroad, and the wineries were on the charm offensive to attract workers and plug the gap caused by the Covid-19 shutdown.

But even with a full workforce, which Infometrics feared would not happen, the wine industry was “in the firing line.”

Its profits were forecast to decline by $ 9.8 million by March 2022 due to a decline in demand for “high-value, high-cost” wines at overseas restaurants, which were not earning enough.

It was also facing a $ 30 million drop in its gross domestic product (GDP), which would outpace any growth Marlborough made.

A report released after the public meeting said that wineries that could make the transition from bottled exports to bulk exports were more likely to be more resistant to the expected economic downturn.

Economic Action Marlborough (TEAM), the inter-organizational group leading Marlborough’s economic comeback in four phases, would outline its second phase (‘resilience’) plan between April and June next year.

The second phase would focus on maintaining cash flows and jobs after the government wage subsidy assistance ends.

Marlborough in March 2022

4.9% unemployment

$ 73 million of lost earnings

1530 jobs lost

2.4% drop in GDP