Friday, September 18, 2020

Kate Hawkesby: Will we see that economic bounce back?

So we got the GDP figure yesterday - the one we've been bracing for. The one Treasury predicted could be as bad as 16 per cent

Banks thought it would be around 7 to 13 per cent. It's landed at 12. A drop of 12.2 per cent to be exact. Officially, it's a recession.

Which we knew anyway didn't we? Seven weeks in lockdown doesn't make for pretty reading on economists' spreadsheets.

We knew it from the struggles we saw around us - from the local greengrocer to the hairdresser to the butchers to the cafes and the retail stores.
But "it's not the size of the fall that matters," according to one bank, "but the size of the rebound".

So will we see a strong bounce back?

Well that depends, I guess, on how many businesses can push through this and are in good enough shape to weather the financial storm.

Our local café shut its doors the other day, thanked customers for their support, and bowed out. Our vet's on the move to cheaper digs as the rent became untenable. Many businesses are either having to reinvent, downsize, or close their doors entirely.

Air NZ's looking to cut more jobs - 385 cabin crew this time, due to low passenger numbers and reduced international routes. According to one report, the airline expects uncertainty for another six months at least, it could be longer.

And that's part of the problem too, isn't it? How long is a piece of string? Predicting the future would be great if all businesses had a crystal ball, but they don't and that means a lot of this clawing back relies on stamina.

Yes, the bottom line is imperative, but there will be many relying on guts and determination and grit too.

But then there's the good news stories out of all of this as well about those who have - to use a thrashed new word this year – "pivoted".

The fashion industry workers facing redundancy who took up making masks instead. The food wholesalers who supplied restaurants, taking up residential customers and boxing up food in smaller amounts.

There are plenty of stories about people who've turned their hand to something else, just to get by. Businesses turning to the virtual or digital world; companies reconfiguring office spaces as more of their team work from home; the push to buy New Zealand made or holiday in our own backyards; the B&Bs offering up different packages for locals; the domestic tourist operators who're changing the way they market themselves.

Tough times build resilience - just ask anyone in Christchurch who lived through the earthquakes.

Yes it's been a bleak winter. But let's hope spring signals the start of tiny shoots of a tangible bounce-back.

Kate Hawkesby is a political broadcaster on Newstalk ZB - her articles can be seen HERE.

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