Central Otago’s economy and development had been on a roll before Covid-19 struck.
Central Otago District Council economic development manager Nick Lanham told councillors at a full council meeting last week, the “great guns” experienced in recent economic and material growth might have been lost.
“The situation is expected to change significantly.”
While the depth and duration of the looming economic decline was not yet clear, modelling suggested recovery was expected to take up to five years, he said.
Presenting the economic development recovery plan, Mr Lanham said Central Otago’s economy generated about $1.3billion in 2019.
Then, there were 13,155 jobs including seasonal and part-time work had outperformed the rest of New Zealand during the decade to 2019.
While Queenstown was the “epicentre” of fallout from Covid-19, the effect of the pandemic would not leave Central Otago’s economy unscathed.
Initial forecasts were for employment to fall by 10.5%, above estimates of the national level of 9.8%.
Central Otago house prices were predicted to fall by 11% in the next 12 months.
There were some strengths across the district and Central Otago’s horticulture and viticulture sectors, alongside sheep and beef farming, would cope well as the backbone of the district’s economy, he said.
However, seasonal labour issues would be compounded by border closures concerned councillors.
Cr Stephen Jeffery said when the fruit season started, the critical labour shortages would become “political” and action would be needed from central government to address that.
Cr Martin McPherson said Central Otago’s situation would be one shared by Marlborough and Hawke’s Bay, but the relocation of workforces needed to be targeted.
Domestic visitors to Central Otago accounted for 76% of tourism spending in 2019.
That compared with 37% in Queenstown, Mr Lanham said.