Study suggests Wellington regional economy may avoid worst of downturn

A high-level discussion document on the most likely impacts of COVID-19 suggests that Wellington may be in a better position to ride out the coming economic downturn and could emerge in better shape than some other regions.

The document, developed by Greater Wellington Regional Council, notes the downturn may be less severe in the region because Wellington's proportionally high levels of employment in social services and businesses working with or for government could cushion it from the worst outcomes of the downturn.

"It's a discussion document written in a quickly changing environment, but it notes that with a backbone of professionals making up around 43 per cent of the regional workforce, we may just be spared the worst," says Greater Wellington Chair Cr Daran Ponter.

According to the document, Possible Impacts of COVID-19 on the Wellington Region and Greater Wellington, many of the services they provide are regarded as essential and can be delivered from home, enabling this workforce to ride-out the impact of the virus while continuing to provide services.

"But make no mistake, there's no get out of gaol free card."

"Outside of Wellington City, many of the region's small to medium businesses will financially suffer from the terrible disruption which will be caused by COVID-19, particularly in the region's town and city centres. We will be looking at regional impacts in much more detail in subsequent studies."

Given today's uncertain environment, the document's findings necessarily contain many assumptions about the future, and have been based on future scenarios focusing the short (2020) and medium-term (2021-2025) developed to help Greater Wellington prepare for a variety of possible outcomes.

Under this approach, the impacts on our regional wellbeing framework, which comprises population, economy, social, environmental and cultural sectors worsen in proportion to the severity of limitations on social interaction. Impacts are generally greatest at COVID-19 Level 4, falling in line with lower levels, subject to their duration.

The only exception is the regional environment, which has seen dramatic improvements in air quality and reductions in greenhouse gas emissions due to the lockdown.

"But no matter how you cut it life in the Wellington region is going to be very different in the short to medium-term, with negative impacts to population growth, economic vitality and tourism," says Cr Ponter.

"We now must look towards response and recovery as a region and Greater Wellington needs to consider how it will provide leadership in this endeavour. There is no doubt that the public sector, be it at national, regional or local level, will play a key role in reconstructing the region."

"The regional council hasn't escaped damage from the impact of the virus. Some of our operations and revenues have been significantly impacted by COVID-19, but we are quickly responding to the challenges, and making plans to be as effective as possible under a new normal."

"As we seek to stimulate the economy, we must not lose sight of our longer-term goals and overarching purpose, so we will focus on promoting the social, cultural, environmental and economic wellbeing of our communities."

"In a fast changing, volatile environment, information is vital to making sound decisions. Greater Wellington will continue to monitor the impact of COVID-19 on a monthly basis and feed information into the regional community for its own use in navigating these difficult times," says Cr Ponter.

Read the Possible Impacts of COVID-19 on the Wellington Region and Greater Wellington document (PDF 2.6 MB)