Coronavirus: Economic activity drops 13 percent compared to same time last year

There's now a better idea how much COVID-19 has damaged New Zealand's economy.

Between April and June, economic activity dropped almost 13 percent compared to the same time last year.

When it comes to the individual regions, the hardest hit was Otago, where reliance on tourism saw financial activity drop by almost 16 percent.

The West Coast and Auckland also received a battering - but there were regions that weathered the storm better. A focus on the primary economy meant Gisborne and the Manawatu-Whanganui area still had a downturn, but it wasn't as bad as other areas.

However there's more bad economic news to come as it remains quiet in former tourist hotspots such as Queenstown. Aucklanders make up half of the local visitor numbers to Queenstown but they are in lockdown.

Economist Brad Olsen.
Economist Brad Olsen. Photo credit: The AM Show

"Certainly the level 3 in Auckland has had a significant impact on us but our operators are dealing with the situation they have in front of them - right-sizing and downsizing their business," Destination Queenstown chief executive Ann Lockhart told Newshub.

That means job losses. More than 210,000 people are currently receiving Government job support.

And the ramping up of COVID-19 alert levels have been another hit for already struggling businesses.

"That has really kicked the guts out of confidence in the economy," said Infometrics senior economist Brad Olsen. "Talking to retailers and other operators throughout the country, things are tougher again."

The latest from Infometrics reveals economic activity dropped by almost 13 percent between April and June, compared to last year. That's the largest single hit to the economy on record.

"We are going to see continued economic scarring as the country adjusts to the new normal," Olsen told Newshub. "We are not out of the woods yet when it comes to this economic downturn."