Development West Coast (DWC) has committed $5 million towards a package to help protect the social and economic fabric of the Glacier Country.
A recent survey conducted by DWC and the Glacier Country Tourism Group has revealed the devastating impact COVID-19 is having on Franz Josef, Fox Glacier, and the surrounding settlements.
According to survey results: 62% of jobs have been lost in the Glacier Country, 16% of businesses have closed, at least 23% of people have left, and the area has experienced significant losses of volunteers in key community services.
It is forecast that in the next six months, if there is no additional support, 84% of jobs will be lost, 67% of businesses will be closed, and at least 31% of people will leave the community.
DWC chief executive Heath Milne said Glacier Country has been a key contributor to the economy of the wider West Coast region and New Zealand. Pre-COVID, it was responsible for 21% of inbound tourists to NZ and contributed around $120m per annum to New Zealand’s GDP.
“When we come out of this situation, and international tourists return, if that community isn’t there to host them it is going to have an impact on the whole country.”
“The true value of Glacier Country goes far beyond its significant economic contribution. Over 1,170 West Coasters have built lives and families in the area, with many contributing to the wellbeing of their small communities through volunteer services.
“The conversation is not just about tourism - it is about the community. It is about the teachers, builders, electricians, and the volunteers providing fire and emergency, ambulance and search and rescue services. This is about the social fabric of the area. The community down there will not survive unless there is some form of support.”
In response to the current crisis, DWC has committed $5m towards an assistance package.
“The focus of the assistance will be decided after consulting with the community facilitated through the Glacier Country Tourism Group. The Group has been liaising with the wider community over the past week to get input as to the best way to utilise the funding to the benefit of the whole Glacier Country area.
“Given the gravity of the situation in Glacier Country, we believe there is still a good opportunity for Government to work with local communities to help protect their social and economic fabric, and ensure they are ready and able to significantly contribute to the national economy once again when it rebounds.”
Media Release: 4 March 2021
Infometrics quarterly economic monitor
The latest provisional data from Infometrics shows that the West Coast’s economy declined by 1.5% over the year to December 2020, compared to a national decline of 2.6%.
DWC chief executive Heath Milne says the economic impact of COVID-19 has been felt in vastly different ways across the region.
“Buller District’s GDP grew by 3.4% based on the strength of its primary industries, while the Grey District saw a decline of 3.4%. The Westland District, which has been hard hit by the loss of international visitors, experienced a decline of 3.6%.”
The West Coast’s house values have appreciated at their strongest rate in over a decade, with growth of 12.5% in the year to December 2020. This brings the Region’s average house value up to $250,024.
“The data suggest that the lifestyle appeal of the West Coast has come into strong focus since the COVID-19 lockdown,” says Mr Milne.
West Coast house sale volumes were at a record high of 576 in the 2020 year, a 15.2% annual increase.
This high level of interest in West Coast housing is yet to substantially affect construction, with new dwelling consents easing 17.3% over the year to December 2020. Non-residential consents ticked up 18.2%, undoubtedly aided by a number of Provincial Growth Fund projects around the region.
Due to the impact of COVID-19, the number of Jobseeker Support recipients has grown strongly over the past year, with a 24.9% increase in the West Coast, behind the national increase of 35.9%. The increase has been most pronounced in Westland and Grey Districts. The number of filled jobs in the region had recovered by November 2020, but the spread across districts and industries is patchy.
“The West Coast has done well to attract domestic visitors post-COVID, with domestic visitor spending 46% higher in the December 2020 quarter compared to December 2019,” says Mr Milne.
“However, this has been unevenly spread, with the strongest increase in Buller, and little increase in Westland on the back of the struggles in the Glacier Country.”
Agriculture and food processing accounted for 16% of the West Coast’s employment in the year to March 2020.
According to Infometrics, these industries are expected to buoy the West Coast’s economy, particularly while international borders are closed. Returns for New Zealand’s food exports have been relatively resilient through COVID-19, and rising prices for dairy products are forecast to deliver a 1.2% increase in the dairy pay out to West Coast farmers in the 2020/21 season.
“While we are faring better than much of the country on a number of economic indicators, we must acknowledge the challenges currently facing the Glacier Country area,” says Mr Milne. “After assessing the likely impact of a continued border closure for the next year, a request has been sent to government for specific support to help those communities survive.”
“And as a region we have other significant challenges/opportunities on the horizon.
“The Climate Change Commission has issued a draft report to Government for consultation on 31 January. This report gives advice to Government on the steps required to achieve New Zealand’s target of net zero emissions by 2050.
“Everyone in New Zealand will be impacted by the recommended actions in the report, both businesses and individuals, so it’s important that everyone has their say. The Commission has now extended its submission deadline to March 28, after which the final advice will be presented to Government.”
You can make a submission online with the following link:
Infometrics Quarterly economic indicators:
Data shows the West Coast economy was tracking well for the year to March 2020. However, following the impact of COVID-19, forecasts going forward are painting a far more challenging picture.
Data released by Infometrics for the year to March 2020 reveals Gross Domestic Product (GDP) on the West Coast was up 2.0% from a year earlier, outperforming New Zealand’s 1.6% growth rate during the same period.
With the impact of COVID-19, and the border closures, a lot has obviously changed since then. The data for the March 2020 year only captures the very early stages of the pandemic.
Even before COVID-19, our tourism sector had been hit hard by a series of extreme events; including the Waiho Bridge washout, Omoto slip and the disruption caused by the Mt Hercules slip. The data from Infometrics shows total visitor spending for the year to March 2020 fell from $522m to $480m.
Despite this significant drop in visitor spending, the West Coast economy finished the period with $42m growth in GDP and 139 new jobs - highlighting the importance of a diversified economy.
Looking at the situation going forward, another Infometrics report, commissioned by Treasury, forecasts that the West Coast will be one of the most heavily affected regions by the pandemic and its economic aftermath.
The report suggests the West Coast may have 1,300 less jobs by March 2022, with our economy forecasted to take a $94 million hit.
The disruption caused by COVID, and the associated job losses, is projected to take some time to recover from. The modelling suggests our GDP won’t be back to pre-COVID levels until March 2025, by which stage jobs are expected to rebound above 2020 levels.
Before COVID, tourism accounted for 10.4% of our region’s economic activity, and 51% (or $231m) of our tourism spending came from international visitors.
Much work has been done to attract the domestic market to the Coast. Increases in domestic travel have helped pick up some of the slack but spending by New Zealanders will not come close to filling the hole caused by border closures.
The projections on jobs losses are very concerning.
A recent survey of Glacier Country businesses reveals that 16 businesses have closed so far, and 393 full-time jobs in addition to 125 part-time and/or casual jobs have already been lost.
This is devastating for the economic and social fabric of such small communities.
Based on the Treasury-commissioned forecasts and the current realities we are documenting on the ground we are working with agencies to look at options for support.
We need to ensure communities are viable and businesses are still around to share in the recovery when it finally comes.
COVID-19 Impact survey
A new COVID-19 impact survey by Development West Coast and the Glacier Country Tourism Group highlights the social and economic impact the pandemic is having on Franz Josef, Fox Glacier and the surrounding settlements.
Key takeaways of report
- 16% of businesses have closed,
- 62% of jobs have been lost,
- Businesses operating at 20% their normal capacity (on average),
- At least 25% of the population has left,GDP contribution is forecast to be down by $382.1m over the next 4 years,
- At least 38 community volunteers likely lost,
- Fire and Emergency Services short-crewed 55-75% of the time.
Download a copy of the full report:
February has arrived already, along with the brilliant spell of fine weather we’ve enjoyed in recent days.
Over the holiday break it was fantastic to see so many locals and visitors out and about enjoying all the Coast has to offer, from exploring our untamed natural wilderness to attending many brilliant events including race meetings, A&P shows, festivals, anniversary celebrations, street markets. Even some of the wet days didn’t appear to dampen too many spirits. Coasters do seem to be incredibly forgiving of our wet weather once the sun comes back out and stays for a while.
Coasters are also incredibly passionate about their Region. The recently released Climate Change Commission Report will no doubt bring this passion to the fore. The large document will create much discussion and hearty debate amongst us all, with views from varying ends of the spectrum. We must remember this document is a draft. The consultation period is open until 14 March, and there is opportunity to provide feedback by way of submission. This feedback will be considered with final advice presented to the government by 31 May. Whatever the outcome, it’s crucial we have a clear roadmap, with workable implementation plans, that are supported by science, and funding, to help us navigate our way as we adapt and transition.
2021 has started with much activity and the year is shaping up to be another one of many challenges. Or continuing challenges, as is the case for tourism businesses in Glacier Country. This spectacular part of the West Coast has been luring visitors from near and afar for many, many years. The glaciers, such incredible natural wonders, a drawcard for NZ, making this area a significant contributor to our economy. It’s a special area, and these are special circumstances, so hopefully some extra support is available for the Glacier Country community soon.
Next week DWC has its first Trustee meeting of the year and we’re delighted to now have eight Trustees around the table, with the appointment of Brent Ford as the Independent Finance, Audit & Risk Trustee. Brent is very familiar with the Trust as well as the challenges and opportunities the West Coast faces.
We also welcome Eric de Boer on an internship, recipient of the Institute of Directors’ First Steps in Governance Award. Eric’s enthusiasm and appreciation of the Coast will be a great asset.
March will mark one-year since COVID-19 was declared a global pandemic. Looking at what is happening elsewhere in the world, there is still no better place to be than here in NZ, especially here on the West Coast.