A new report has revealed the extent of the damage done to regional economies from the COVID-19 outbreak.
The Infometrics Quarterly Economic Monitor, released on Thursday, provides a comprehensive analysis of regional economic change during the pandemic. It shows regional economies received a "substantial hit" from the virus and the subsequent lockdowns it caused.
The worst-hit regions were those reliant on tourism, while areas with a strong primary sector managed to fare better.
"The immediate economic ramifications vary by region and the end results are clear to see - economic activity has fallen in all regions, nearly 50,000 Kiwis have lost their jobs, businesses have struggled to cope with lower earnings, and incomes were reduced," Infometrics senior economist Brad Olsen said on Thursday.
"Infometrics currently expects that economic activity was down 12.6 percent per annum in the June 2020 quarter, as the economy endured a dramatic shift in focus, from life support at level 4 to an adrenaline rush at level 1 over the three-month period."
The Otago region was hardest hit, due to the collapse of local tourism activity, with a 15.6 percent per annum drop in economic activity.
The Manawatū-Whanganui and Gisborne regions "weathered the storm as well as could be expected", with economic activity falling by less than 9 percent per annum, according to the report.
Olsen said the structure of local economies was "key to deciphering how the economic hit will reverberate" throughout the national economy.
Areas with a greater economic focus on international tourism would "feel the prolonged effects" of the downturn, Olsen said.
"Those local economies with a strong primary sector, particularly in food production, have held up better as New Zealand's exports continue to feed the world. Combining these various effects has resulted in a scattered regional economic picture."
Olsen said although spending rebounded after dropping considerably during the first lockdown it wasn't enough 'to make up for what wasn't spent", with data showing spending in the June 2020 quarter down 20 percent compared to the same quarter last year.
"The June 2020 quarter likely represents the largest single hit to the New Zealand economy on record, but the economic scarring and restructuring will continue to occur over the coming years.
"New Zealand is not out of the woods yet."
