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Manawatū well-placed to weather choppy economic outlook

We are now just past the first week of Alert Level Two, with businesses across our region opening their doors and working in a safe manner. It’s a different world, with click and collect to the fore, managed shift work to ensure social distancing and no doubt some incredibly busy courier drivers rushing about town.

Meanwhile business leaders, economists, central and local government have been considering the economic impact of COVID-19, and the steps we can take to lessen that impact.

The good news for our region, is that we entered this crisis with our economy in good shape. A number of large infrastructure projects are already underway or in the pipeline, and our diverse economy means we are less effected by the downturn in tourism when compared to other regions.

Chair of CEDA Malcolm Bailey sees strength in our regional economy which will put us in good stead for the months and years to come.

“We are as resilient and as well placed as anywhere in New Zealand,” he says.

“The farming, food production and agribusiness sector is dominant in our region and this sector is one of the least affected by COVID-19. Plus, our central location means our logistics and distribution sector has been a growth sector which will likely continue.”

“We also have very strong education, research, health and defence sectors which, despite the challenges for international student education, are vital and resilient.”

“Additionally, our manufacturing and tech businesses are innovative and adaptable, based on our highly educated workforce.”

CEDA Chief Executive Linda Stewart believes if any region can bounce back from the economic impacts of COVID-19, it is ours.

“It is important to know that we have got this, we have strong regional leadership, we responded quickly in the early stages, and we have developed solid recovery plans and actions,” she says.

“We know where we are at and we know what we need to do to kickstart our economy back into action.”

“Projects such as the KiwiRail Regional Freight Hub, Te Ahu a Turanga, the Mercury windfarms and developments at Ohakea will bring huge levels of investment into the region, and with that numerous jobs. This will lead to a positive knock on effect for local retailers and hospitality providers.”

“Public investment into these projects will also boost confidence for private developers to continue investing in the city.”

Manawatū Chamber of Commerce Chief Executive Officer Amanda Linsley agrees.

“We are an incredibly innovative region and we know how to work collaboratively, now more than ever before,” she says.

“The likes of FoodHQ will be instrumental in moving forward as the primary sector will be looking to create high value products to achieve a greater return on investment.”

“We also have a robust contact centre industry, with over 2400 staff already geared to work from home or other locations.”

“That isn’t to say people and businesses in our region are not hurting, because they most certainly are.”

As most businesses come back online after nearly five weeks in Level Four Lockdown, CEDA, along with partners the Manawatū Chamber of Commerce will continue to provide advice and support for businesses to get through this unprecedented time.

Business owners can be linked up with mentors, free webinars are being held weekly and networking opportunities such as the Manawatū Chamber of Commerce Facebook page have become incredibly popular. CEDA are also working with businesses who are experiencing importing issues to revitalise the supply chain, while the Chamber of Commerce have a Back2Business group starting up.

From a local council perspective, Manawatū District Council (MDC) have agreed on a 0% rates rise for the coming year, with reduced fees for some businesses such as alcohol licensing. MDC have also sought central government funding towards their shovel ready project, the construction of a state-of-the-art plastic recycling and reuse centre that will collect all grades of plastic, including agricultural plastic, from the lower North Island. The total project is worth approximately $24 million with MDC applying for 50% of the cost.

Brent Limmer, MDC General Manager of Community and Strategy explains how the plant could work in greater detail.

“The finished product can be mixed with virgin plastic and used for normal plastic manufacture. The Equipment is all commercially available, the land is already owned by MDC and designated for recycling. The key is scale, for the plant to be economic under current conditions, it would need to process approximately 14 000 tonnes per annum, which would be supplied by the lower North Island.”

Palmerston North City Council have also applied for funding of 10 shovel ready projects including social housing, roads and airport improvements, totalling $124.9 million. Mayor of Palmerston North, Grant Smith believes that these projects, along with other factors, put us in a good position to recover from the COVID-19 crisis.

“We thought very carefully about project selection. Overall, these are projects that can kickstart the local economy and provide confidence for private sector developers and investors to continue to invest in our city’s growth.”

“In March, we had a record-high of $95 million in the value of building consents lodged, that is a valid indication there is confidence in the city for continuing development."

“We are working to ensure people are focused not just on the recovery but also on realising the potential opportunities we have in the city and region over the medium term.”

Meanwhile Talent Central and CEDA are working to retrain and redeploy people into growth industries such as construction, aged and disability care, the primary sector, and logistics.

CEDA surveys in 2016 and again in 2019 identified a shortage of people to fill jobs as the largest constraint to business growth. So while we started this crisis with the capacity to employ more people, this will now have changed. That said, there will be openings for people who are prepared to adapt to the changes and new opportunities.

Talent Central are ensuring they provide gateways into those new career paths. They are running online courses for the logistics sector along with an extension to the AgriQuest event which was originally planned for the Central Districts FieldDays. AgriQuest opens up opportunities for young people and students to find out more about the primary industries and agribusiness.

As a community, Amanda Linsley encourages us to support local, buy local and stay local.

“Keep your money within the region whenever possible,” she says.

“Now more than ever before, it is crucial that we get out there and support our local community, purchase from our retail stores based just down the road, grab some takeaways on a Friday night and advocate locally made.”

Recently launched initiative is a great resource with a comprehensive list of local businesses to support from the comfort of your home, along with numerous ideas on things to see and do within the region. It also provides a digital platform for businesses to get in front of our consumers.

CEDA is also leading a regional marketing campaign to boost domestic visitors, especially those within a 2-3 hour drive time. We are also aiming to bring business conferences back to the region.

“Our visitor sector has been experiencing strong domestic growth over recent times, so this is an opportunity to build on that,” says Linda Stewart.

“We have some recreational and cultural gems in our backyard, along with a vibrant arts scene, and fabulous restaurants, so once travel restrictions have been lifted, encourage your friends and family to come and explore the Manawatū.”

Malcolm Bailey believes that following crisis there is always opportunity.

“It is too early to be specific but there is a saying ‘never waste a crisis’,” he says.

“A crisis is a forced opportunity to look at improving business efficiency and productivity to ensure long-term viability.”

“The lockdown has highlighted that it is possible for some businesses to find new ways of working and change their product offerings. We are adaptable and we will continue to be able to adapt.”

Business support continues to be available in Manawatū and Palmerston North, to find out more please contact Manawatū Chamber of Commerce or CEDA directly.

This was published in the 60 Seconds with CEDA newsletter on May 20, 2020. Sign up here to receive our newsletters directly

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