Wellington is one of the hardest-hit regions of Covid-19 economically, largely due to people working from home and spending less.
The New Zealand economy is recovering, but Wellington is countering the trend.
According to a new report from Infometrics, economic activity in Wellington fell 1.5 percent for the September quarter, the fourth worst performer of any region in the country.
Auckland, Otago and Canterbury were the three worst performers respectively.
Many Kiwis want to come home at the height of their game, according to a Kea study.
Brad Olsen, senior economist in the field of infometrics, attributes Wellington’s poor performance to civil servants working from home, a drop in business travelers and increased competition from other regions.
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The city faced growing challenges from areas such as Hawke’s Bay and Whanganui to attract businesses and people, he said.
“The challenge is to attract talent, you have to make sure that you have good job opportunities and good life opportunities. That will pose a number of challenges for the Wellington region, ”he said.
“Many of these problems will be difficult to solve quickly. Much attention will need to be given to Wellington’s business appeal and marketing as not just a place to visit but a place to base yourself. “
It’s not all bad news, though. The region had benefited from reliable public service employment and a strong construction industry, he said.
John Milford, CEO of the Chamber of Commerce, said the region had a decent economic performance over the weekends, but was let down by Monday through Friday business as more people worked from home.
“The Monday through Friday challenge may be an ongoing challenge. If it’s the new normal, business in the city will have to adapt, ”he said.
Municipalities have limited options to spur consumer spending outside of tourism advertising, but could consider adjustments to parking costs or greater investment in public transport, he said.
“That only means more expenditure for the city, for which taxpayers have to pay.”
Wellington City Council has faced an avalanche of costs, including repairing Wellington’s ailing pipes, the Let’s Get Wellington Moving project and Wellington Library upgrades.
Council insiders confirmed this week that tariff increases of up to 23 percent could be considered for next year.
According to Milford, Wellington’s economic recovery depends on one thing: the Trans-Tasman bubble.
Tourism in Wellington is highly dependent on Australia. About 70 percent of the international travelers to the region are Australian.
However, new lockdown measures in South Australia have put hopes of a bubble in the near future on ice.
Wellington mayor Andy Foster said he was working with companies to write a new economic development strategy. The last version was written in 2011 and was “outdated so far that it is pointless”.
Foster said the biggest question was how to strengthen the central city.
“We need to create an atmosphere where people say ‘I want to be in Wellington’ and not ‘I need to be in Wellington’ because it’s a great place to be.”
Foster hopes to see a boost in retail spending in the run-up to the holidays.
Its policy of introducing free weekend parking was dropped by the municipality earlier this year, but the municipality this week announced a special offer to offer the first two hours of free weekend parking at Clifton Car Park, owned by Waka Kotahi.
Correction: Due to inaccurate information from Infometrics, an earlier version of this story said that economic activity in Wellington fell 4.4 percent in the September quarter, making it the second-worst of all regions in the country. Wellington’s economic activity even declined by 1.5 percent, making it the fourth worst performer.