The economy has rebounded strongly in Alert Level 2. Traffic data to Thursday suggests there are still big shifts taking place in the economy. Commentary below and the full dashboard is here.
Spending back to normal: We are pleased to report on consumer spending again. In the first five days of Level 2, consumer spending at shops is back to pre-Covid levels. But there are wide variations across segments, RNZ reported. Retailers are waiting to see whether the current level of spending is sustained, or if it is catchup spending from the lockdown.
USA experience to date suggests caution: Spending in Texas, USA, fell by 30% during ‘shelter in place’ orders. But 10 days after restrictions were lifted, spending remains 12% lower, according to an economic tracker. Health and job security fears matter a great deal for household spending. NZ is so far tracking better in the post-lockdown phase but had a bigger reduction during the lockdown (50% fall). The cumulative success of respective strategies will tell over time.
Industry normalising: Electricity use is back to normal, suggesting industries are back operating. But activity is likely still below normal. Businesses are cautious. Job advertising has improved to about 75% of normal. But job ad views are above the pre-Covid levels, suggesting there are more jobless looking for work. Those still hiring will have more choice.
Working from home still: Working from home is still apparent in upstream internet data, which is now 30% higher than pre-Covid, down from 90% in Level 4 and 75% in Level 3. Overall internet data use is back to normal, suggesting we may have exhausted all that online streaming.
Travel still low: Traffic congestion levels remain around 30% below normal; even lower in Auckland and Wellington. This confirms many continue to work from home, and there have been many job losses. MSD data show the pace of job losses have slowed (from over 6,000 per week to 1,606 in the week of 15 May). Although we suspect a new wave of job losses is coming, as the wage subsidy runs out and business adjust to the current economic reality.
Spending at shops has rebounded to pre-Covid levels in the first 5 days of Alert Level 2.