Economic Weekly: NZ vaccinations to reduce risk of another Valentine’s day COVID-19 heartbreak

As Auckland enters back into Alert Level 2 and NZ back into Alert Level 1 this week, fingers and toes remained crossed that we don’t see any additional unexplained community cases again.  With the NZ vaccination campaign now underway for border workers, the risks of further breaches into the community will reduce over the coming months. Our chart of the week compares NZ and Australia’s vaccination progress (% of population), although note that NZ’s figures are only updated weekly. On Wednesday last week, NZ and Australia had both managed to vaccinate 0.2% of their populations.  But the road to the end of the pandemic remains long and treacherous and, with NZ reliant on offshore producers for vaccines, Italy’s recent move to block exports of COVID-19 vaccines to Australia is a concerning development for NZ.

This week, February electronic card spending data will reveal the impact of the initial lift in Alert Level restrictions from Valentine’s day outbreak.  Spending in February 2021 will likely be well down compared to February 2020 for three reasons:

1)                   The rise in Alert Levels from the initial response to the Valentine’s day outbreak.

2)                   The reduced number of overseas visitors weighing on tourism-related spending.

3)                   February 2020 had an extra day as it was a leap year (which all else equal can reduce spending by 3.4%). 

Normally we can rely on StatsNZ’s seasonal-adjustment to take into account of leap years, but StatsNZ has not been able to consistently produce seasonally-adjusted figures over recent months due the dramatic changes in spending patterns brought about by COVID-19.  

Our own internal data show that for most weeks during February, household spending was running comfortably ahead of year-ago levels and was particularly strong over Waitangi Weekend.  However, spending did drop below year-ago levels during the week with Auckland at Alert Level 3 for 3 days and the rest of the country at Alert Level 2.  Card sending over the subsequent week did return to around normal levels, but did not compensate for the previous week’s drop.

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Mark Smith

Senior Economist

Mark joined ASB in 2017, with over 20 years of public and private sector experience working as an economist in New Zealand and the UK.

His resume includes lengthy stints at ANZ and the Reserve Bank of New Zealand, and he has also worked at the Bank of England, HM Treasury and the New Zealand Transport Agency. Mark's areas of specialisation include interest rate strategy, macro-economic analysis and urban economics.

Born and bred in the Waikato, Mark studied at Waikato University where he graduated with a Master of Social Sciences, majoring in Economics.

Mark's key strengths are the ability to use his extensive experience, inquisitive nature, analytical ability, creativity and pragmatism to dig a little deeper and to deliver common sense solutions to tackle complex problems.

When not at work Mark likes to travel, keep fit and spend time with his friends and family.