New data from Bank of New Zealand (BNZ) show card spending has taken a big hit because of the COVID-19 Delta lockdown, but the reduction is lower than at the comparable time in New Zealand’s Level Four lockdown last year.
BNZ Chief Economist, Paul Conway, says, “Card spending is down 43 per cent compared with before the Delta lockdown. At the same point in the 2020 Level Four lockdown spending was down 58 per cent.
“This suggests the economic impact of this lockdown may be less extreme than we experienced during Level Four lockdown last year. This could reflect higher confidence about job security and the likelihood that the Delta lockdown will be shorter. It may also be because we are now better at working and shopping online,” says Conway.
Many businesses will be given an additional boost with most of the country moving to Alert Level 3 as of this morning. However, with Auckland making up a large part of the New Zealand economy BNZ will be tracking regional differences from this point forward.
“Lockdowns are extremely challenging for businesses, but the declining trend of cases in Auckland is cause for optimism and government support will help soften the blow. Household balance sheets appear to be in a strong position too, which positions the country well for rebounding from this outbreak.
“We’ve been here before and we’re better prepared to deal with not only managing the outbreak, but its economic impacts as well,” says Conway.
Full report is available here.