Coronavirus: What the pandemic is costing small business

It is week five of New Zealand's great lockdown. We've saved lives, but an estimated 30,000 people are newly out of jobs and businesses are struggling. 

This week will see the nation step down its alert level - offering hope that normality is just over the horizon. But not all of us will make it there intact, and even those who do have an uncertain journey ahead. 

On 11:59 pm on March 25 New Zealand was ordered into lockdown with just 48 hours' notice. Prime Minister Jacinda Ardern told the nation the Government's strategy to tackle COVID-19 was to "go hard" and "go early". 

Economic activity ground to a virtual halt; elimination, not just control of COVID-19, the stated goal. It is a strategy that so far seems to be working. We have saved lives - albeit at a grave economic cost. 

New cases here have fallen to single digits in the last week; our mortality rates are among the lowest in the world; and we are making tentative moves towards reopening the economy after just over a month in lockdown. 

In comparison, those living in Italy, France, the US and the UK are facing at least two months of lockdown. Those in China's Wuhan, where the virus originated, had to tolerate three months. The death toll in each place has been in the thousands and tens of thousands. 

For Kiwis the gradual return to life outside their bubbles on Tuesday is welcome; contactless businesses will be allowed to start trading; many will be able to return to work albeit - with strict social distancing measures. 

It is a move that will help many - but not all. Businesses Newshub Nation spoke to that were able to open were having to adapt. Those in hospitality were looking at ways to put their businesses online and look to delivery and click and collect options. 

Strategies that would help with cashflow during level 3 but was likely to only bring in a fraction of the usual business.  But for others where customer contact is an integral part of business, contactless options during level 3 are simply not viable.

Marysa Theiler is a mother-of-two. She owns a boutique fitness studio in Auckland's Grey Lynn. On-site classes remain out of the question at level three, and online classes have not taken off. 

Having children at home during her normal working hours also poses an additional challenge. 

The former ballet dancer estimates her business could go under if she's unable to reopen by June. As it stands, her revenues are down 85 percent. 

"It makes me feel sad that maybe it won't survive, but I am doing all I can that hopefully we can come out of the other side, because it has been a real passion of mine," Theiler told Newshub Nation. 

"I do put my heart and soul into it. And we are a two-income family; and we have got a mortgage. 

"I do need my business to help us with the mortgage. But I know there are a lot of people in a lot worse situation than ourselves." 

The spread of COVID-19 has been worse for the economy than the global financial crisis of 2008.

Many businesses will fail, unemployment will reach record highs, and many among us will need a benefit for the first time. The Salvation Army's Ronji Tanielu said there were more people accessing its services than ever before. 

"One of the biggest changes that we've seen is the amount of people that have never used our services before, they've never gotten welfare support before. And so this is their first time using a food bank," he said.

"And so that's the new group of people that we're really concerned about because we're wondering, is this a new group of people entering into vulnerability during this pandemic? And that's a worry for us."

Treasury's economic dashboard showed the number of people on Jobseeker Support rose sharply in the first three weeks of lockdown to almost 170,000 from around 145,000 - a figure that is still rising. 

Coronavirus: What the pandemic is costing small business
Photo credit: Newshub Nation.

Meanwhile the number of available jobs are at record lows; listings on Seek were down by about 76 percent during the lockdown, compared to the same time last year; Trade Me had a 50 percent drop in new job listings. 

Business confidence is also low. In Auckland 30 percent of businesses fear they won't survive the lockdown; more than half of businesses in the central part of the country expect the economy to worsen next year; and in Canterbury more than half say they will struggle to maintain staff. 

New Zealand's economy is in recession. Economists at Massey University estimated nationally GDP was down 8.2 per cent this week. In comparison, New Zealand's economy was down 0.3 percent in the first quarter of 2008 - during the global financial crisis.

Head of economics and finance at the university, Martin Berka, said there were signs the country was facing a significant economic slump. 

"Historians would say this is starting to look like a period of depression which is classified as an otherwise very prolonged period of very bad economic outcomes."

The key question for many is how long will the slump last. Berka said the timeframe was dependent on the sector; he estimated those in tourism or the international education sectors could be among the worst-affected. 

"These sectors are going to be closed for a long time, possibly more than a year, possibly more than three years," he said. 

"Even when you open the borders, the world is a different place now, a lot of people are very worried about travelling at all. Some people may want to come in, but would we be willing to take them in?"

Berka said the return journey would need to be a combined effort from all Kiwis.

"If we can keep it under the lid and try to go to level two that would be great... we can both have the economy running to some extent and control of the virus." 

Senior lecturer at Massey University's School of Economics and Finance Matt Roskruge said while challenges were ahead, confidence should begin to pick up as we step down the alert levels. 

"The main thing we'll see over the next three weeks is just that build-up of confidence. People are starting to feel a little bit more like they're ready to participate [in the economy] again and are not in immediate danger.," he said. 

"Globally we are not going to see the sort of massive downturns that we've seen say with the Great Depression... and there's a lot of opportunity today thanks to our digital existence that was not around back in the earlier depressions." 

A sliver of hope - but one that for now still seems just out of reach for those like Barrefigure owner Theiler. 

"I don't have more than three weeks," she said. "I'm already very stressed now. But the fact that I've got five other contractors that rely on my business to keep going...

"I would feel heartbroken for them not having a place of work for them to come to, for it to support their families." 

Contact Newshub with your story tips:
news@newshub.co.nz