Covid 19 coronavirus: Which regions fared worst? Infometrics forecasts the damage

The Otago region likely took the hardest hit of any New Zealand region during the June quarter. Photo / Otago Daily Times

Otago likely fared the worst of any region in New Zealand during the June quarter, according to new research by Infometrics.

The latest Infometrics Quarterly Economic Monitor shows a substantial hit to regional economies from the Covid-19 pandemic and during alert level restrictions.

"The immediate economic ramifications vary by region and the end results are clear to see – economic activity has fallen in all regions, nearly 50,000 Kiwis have lost their jobs, businesses have struggled to cope with lower earnings, and incomes were reduced," said Infometrics senior economist Brad Olsen.

"Those local economies with a strong tourism focus have seen a deeper hit to activity, and those with a greater economic focus on international tourism will feel the prolonged effects of the downturn."

Infometrics currently expects that economic activity was down 12.6 per cent per annum in the June 2020 quarter.

That compares with estimates of a 16 per cent by ANZ and 13 per cent forecast by Westpac.

The official GDP numbers for the June quarter are due on September 17.

"The June 2020 quarter likely represents the largest single hit to the New Zealand economy on record, but the economic scarring and restructuring will continue to occur over the coming years," Olsen said.

However, economists are also expecting a significant bounce back in activity through the current third quarter.

"Not all regions have felt the economic effects of the pandemic equally," Olsen said.

The Otago region saw the hardest hit to economic activity, with a 15.6 per cent per annum drop, as the collapse in tourism activity hit a number of local economies, the report forecasts.

"Meanwhile, the Manawatū-Whanganui and Gisborne regions weathered the storm as well as could be expected, with economic activity falling by less than 9 per cent per annum.

"The structure of local economies is key to deciphering how the economic hit will reverberate throughout the New Zealand economy" Olsen said.

"Regional economies have taken a battering from the pandemic, but local leaders, businesses, and communities have shown incredible resilience to get their local areas moving ahead."