These NZ companies are getting back to work, but could it be short-lived with the threat of recession still hanging
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Along with various Australian states, our New Zealand neighbours are also relaxing COVID-19 restrictions which means it’s back to work for some businesses.
Up until today only essential businesses, such as food producers, were permitted to remain open. But now non-essential businesses are allowed to reopen if they can demonstrate required safe operating practices.
This morning a number of ASX-listed companies with headquarters or operations in New Zealand declared they were getting back to business.
One sector that can ramp up again is gold mining. Large cap OceanaGold (ASX:OGC) told shareholders it could resume mining activities at its Macraes and Waihi mines.
“We continue to recognise and support the New Zealand government’s strong action to stop the spread of COVID-19,” CEO Michael Holmes said.
“The health and wellbeing of our workforce is paramount and the safe working practices at both the Waihi and Macraes align well with the government’s directives.”
Small cap gold play New Talisman (ASX:NTL) has been eagerly waiting for restrictions to be relaxed, though it is yet to comment on today’s change.
Mid-cap retirement village operator Oceania Healthcare (ASX:OCA) announced it could be settling unit sales again. However it said visitor restrictions would remain unchanged for the time being.
National airline Air New Zealand (ASX:AIZ) will slightly increase its domestic schedule from today to accomodate essential travel as well as air freight.
Level 3 restrictions are expected to be in place for at least a couple of weeks. Business are still required to work from home where possible and cannot have customers on the premises.
Under level 2 restrictions business premises can be open for customers and staff even where it is possible to “work from home”.
But it will be a long road ahead for the New Zealand economy. Bloomberg economist James McIntyre predicts two consecutive quarters of declining GDP and a total fall of 7.4 per cent. This would be the biggest contraction since 1978.
While he thinks pre-outbreak levels won’t be reached until the second half of next year, the recovery is expected to begin next quarter.
Meanwhile, Bloomberg’s Australian economists have predicted three consecutive quarters of declining GDP.
McIntyre also commented on speculation of a ‘trans-Tasman’ bubble forming where business and leisure travel would be allowed between Australia and New Zealand. He thinks this could result in a stronger rebound and earlier recovery for both economies.