6 September 2021

Auckland lockdown affecting Southland businesses

Auckland’s lockdown is affecting a renowned Southland boat building business and many more in the south.

Stabicraft chief executive David Glen said it needed various fittings from Auckland to finish their boats, but they would not arrive while Auckland remained in Alert Level 4.

Though the rest of the country was moving down alert levels, Auckland remained locked down as Covid cases continued to emerge in the country’s biggest city.

Many southern businesses are in a similar predicament to Stabicraft, with the CBD block rebuild also facing challenges getting certain building supplies from Auckland to Invercargill.

Great South chief executive Graham Budd said many southern businesses would only start functioning fully again when Auckland went to level two.

“Until New Zealand’s main market, Auckland, is able to travel again, there will be many businesses unable to recover,” Budd said.

Glen said Stabicraft was back operating under Alert Level 3 rules but the uncertainty of how long Auckland would remain in level 4 was of concern.

“We can still build boats, we can still paint boats and put windows in boats … but we can’t dispatch them because the finishing touches haven’t been applied.”

The Auckland supply issue was “just another wrinkle” to deal with, Glen said.

It came on top of 10 days lost production during lockdown, while supply issues from overseas continued to be an issue for businesses trying to get parts and equipment into the country.

Great South strategic projects general manager Steve Canny said the overall economic outlook for Southland was far from gloomy, with the region’s GDP in June above that of pre-Covid levels.

In February 2020 it was $6.6 billion, before dipping to $6.49 billion in December, then rising to $6.63 billion in June 2021.

“It was previously thought it could take up until 2025 to surpass that pre-Covid figure,” Canny said.

“This lockdown has been pretty short … and we don’t think it’s going to be too big a hit for the overall [Southland] economy.”

About 70 per cent of Southland’s GDP was dedicated to export related activities, which was the highest per capita in New Zealand. And Southland had experienced strong economic growth in the primary and construction sectors especially, but Te Anau and the Catlins had been impacted by the lack of international travellers.

Southland’s population growth was tracking upwards [from 102,600 in February 2020 to 104,400 in June 2021] and the region’s economy was overall looking strong. But Southland needed to target the skills it needed in the workforce and that would require a “reset” of immigration policy.

Economist Cameron Bagrie said Southland had more agriculture and essential service industries than elsewhere, meaning the province would have got out of lockdown in better shape than most.

And he noted the world needed to eat and the “food basket” was a big part of Southland’s economy.

“Lockdown isn’t great for any region, but Southland was wearing one of the cleanest of all dirty shirts, and Auckland got the dirtiest,” Bagrie said.

He expected Auckland to remain locked down for all of September.

“The last place you want to be during a lockdown is a big city because basically everything gets shut down outside of supermarkets. But rural communities operate at a higher level during lockdowns, in regards to how many businesses can stay open, including farming.”

The fact the Tiwai aluminium smelter was still operating was also significant for Southland, he said.

However, he agreed a non-functioning Auckland would proliferate throughout the rest of the country.

“Lockdowns don’t just lock people down from spending, it actually locks down the supply chain … an awful lot of stuff is manufactured in Auckland and redistributed throughout New Zealand.”

Southland Chamber of Commerce president Neil McAra said Southland’s economy would have suffered less in the August lockdown than in the 2020 lockdown, given it was half as long.

“But there’s no question it’s had an impact on a lot of businesses.”

Hospitality, retail, accommodation and tourist businesses had once again been hit the worst, he said.

McAra hoped businesses in the most affected sectors could manage through but said it was uncertain times given the delta strain of Covid-19 had arrived in New Zealand.

“Everyone’s hoping we can get to level two so we can get some trading done, because even level three makes it hard for a number of sectors to operate.”

Published by The Southland Times – 4 September 2021