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Vitality, jobs and GDP at risk in the heart of Auckland city

Press release
Wednesday 6 May 2020

6 May 2020
For Immediate Release

Vitality, jobs and GDP at risk in the heart of Auckland city

Auckland’s city centre could lose more than 12,400 jobs and $3.1B of GDP by March 2021, according to an economic impact report released today by business association Heart of the City.

“Tourism, hospitality, entertainment, arts and culture and retail … the businesses that give the heart of our city its vitality and distinct character, are amongst the worst affected,” says Beck.

“The impact of losing international tourists, students and events took an early toll on these businesses and this was compounded by people working from home.  The large-scale loss of customers will continue to have a severe impact, even once we get to alert Level 2.  The drivers of a dense, busy city centre have now become major risks that need well-considered actions to address.”

Beck says a report from independent economist Strateg.Ease shows that even under a quick exit from Level 3, central city job numbers could drop by more than 12,400 and economic activity (GDP) could drop by more than $3.1B by March 2021, and will take at least two years to get back to where they were before the pandemic.  This is significantly worse than the GFC when jobs fell by 4,400.

“A lot of city-based businesses, such as those in the financial and insurance sector are able to operate remotely at almost full capacity under the current restrictions,” says Beck.”

“However, that’s not the case if you have a bar, a tourism offer, a retail store or a café, or anyone else whose sales are dependent on customers walking past your shop window. For those businesses, there is little appreciable difference between Levels 3 and 4.  And for many, Level 2 will have ongoing restrictions that impact their viability due to physical distancing and a lot less customers.”

“These are the small businesses that offered so much appeal to thousands of workers, students, visitors and residents every day before the pandemic struck.” 

“Moving quickly and safely down the alert levels is assuming a greater degree of urgency as we look to the Government’s announcement on 11 May but more is required to pave the way for a successful future city centre.”

Most small businesses don’t have the reserves to ride out a two-year recovery process or to automatically pivot to a new offer and operating model.

“Many are already struggling due to the impact on revenue of construction work and other changes the city has gone through over the past few years.  We recognise the long-term benefits of these projects, in the same way we recognise the public health imperatives with Covid-19.  But our small businesses are bearing a disproportionate share of the cost of these initiatives with insufficient support offered to date to address cashflow issues”

“If government is serious about creating vibrant and sustainable communities, they need to understand the needs of different communities.

We ask government to show they are serious about economic recovery and the wellbeing of thousands of people who create our vibrant offering. We need a collaborative and sustainable approach to support our small businesses to ensure we have a vibrant city centre to showcase with America’s Cup and APEC still scheduled for next year.  The same principle should apply to other areas raising specific needs.  One solution does not fit all.”