Economists are predicting a double-dip recession in New Zealand's COVID-19 economic recovery; first, the country will see a dip in the economy followed by a rebound and now there's a new warning a second dip will be seen.
The second dip is predicted to come early next year. Infometrics predicts up to 180,000 jobs will be lost by June 2021, dragging spending down. The dip could coincide with a slew of business failures.
David Osbourne lost his job as a retail manager due to COVID-19, so he bought two Barbershop Co. franchises.
"It's been a year of great things that happened for me and yeah, ups and downs, a rollercoaster ride," he says.
He's never owned a business before, nor does he know how to handle a razor.
"I did try to cut my son's hair the other day and it was... absolutely terrible."
He's not the only fresh business owner trying to find their way around the tools.
Tony Strange in Taupō bought a lawn mowing business, Taupō Property Maintenance, just last week.
"It is a steep learning curve because I've never driven one of these machines here," he says
He and his family were looking for a lifestyle change.
"This one came up and we just had a really good gut feel about it."
They're contributing to a 20 percent surge in sales of small businesses.
Chris Small from ABC Business Sales says small businesses are in high demand.
"We've got huge pent-up demand for people wanting to buy businesses."
Brokers say expats returning home and locals looking for jobs are behind the boom. There are not enough businesses on the market for people to buy.
"We've had some pilots from Air New Zealand buy into manufacturing companies," Small says.
Fewer businesses have folded than were initially expected. Data shows insolvencies are down 10 percent compared with last year but experts warn the worst is yet to come.
John Fisk, RITANZ chairman, expects to see more businesses fold.
"When you've got an economic hit that's as big as what we're going through at the moment across the globe, inevitably there are businesses that will suffer out of that," he told Newshub.
Infometrics chief forecaster Gareth Kiernan agrees.
"We think there's still a lot of pain to come through in the labour market in 2021," he says.
Economists are now predicting a double-dip recession, as tourism takes another hit in summer, and we wean off the wage subsidy.
"I think we've been lulled into a false sense of security by the amount of stimulus that the economy's been receiving," Kiernan says.
