Lockdown Leaves $283 Million Unspent In Canterbury
New research has found a $283 million difference in retail spending in Canterbury between 2019 and 2020 due to the Covid-19 Lockdown.
Covid-19, the effect of lockdowns on retail expenditure and displacement effects on the regional economy, was co-authored By Lincoln University’s Dr David Dyason, with Peter Fieger of the University of New England, and Riaan Rossouw, from South Africa’s North-West University.
The study looked at the impact of reduced retail spending from the urban Christchurch population on the wider-regional economy through the inter-and intra-regional economic effects of the COVID-
The results reveal how consumer spending variations has far-reaching consequences in employment in connected, but unsuspecting geographies, through the economic value chain.
It found that during the strict lockdown regime overall retail spending declined substantially.
That translated into 3,605 lost jobs in Canterbury, with the majority of those lost concentrated in Christchurch (3,398) followed by Ashburton (62) and Timaru (40).
“The results of the research reveal how changes in spending habits have a considerable effect on economic activity, jobs and income levels, propagated through the value chains and beyond territorial boundaries to industries that support the retail activity, ” Dr Dyason said.
“The place where the spending occurs represents the final destination of the transaction, and one tends to forget how it impacts the economic activity during earlier value-adding activity, such as primary production, located elsewhere.”
While there was some additional spending evident in the form of pent-up demand immediately after the cessation of the lockdown, the economic impact of a significant amount of 'unspent' money during the lockdown remained months after the lockdown ended, the study found.
It remains up for debate if this represents an uncertainty premium for consumers within the economy, which is being saved or kept for a proverbial 'rainy day' that could potentially re-emerge. Alternatively, it could also be used as deposits or down payment for residential property ownership.