Correcting the headlines: New Zealand’s outlook is better than you might expect

With local retail closures and economic pressures piling up, it’s easy to get caught in a narrative of despair in New Zealand. But Mark Knoff-Thomas, CEO of the Newmarket Business Association, sees a different story emerging – one that highlights resilience, recovery, and real-time improvements in crime stats and business performance. 

In my 10 years as CEO of Newmarket Business Association, I’ve seen Kiwi consumers and businesses weather many storms and those that make it through the worst of it, often come out the other side stronger than ever.

Headlines can often paint a bleak picture. Between the cost of living, increases in crime and political mishaps, it’s become tiresome always looking at New Zealand through a lens of doom and gloom. Especially when in reality, there’s always a silver lining and better days ahead.

Economy on the mend

2024 has seemingly been a continuation of the economic bar brawl we’ve been experiencing over the past few years (with the exception of 2023 – which was a sales record breaker). The recent closures of notable retailers in my Newmarket neighbourhood are a few of many illustrations of the tough conditions many businesses are facing. But, I’m always optimistic, and ever-hopeful, that we’ll continue to get ongoing positive news from the Reserve Bank for the remainder of the year, and into 2025 – New Zealand householders, business owners and consumers need it.

While this period is undeniably challenging, it’s also filled with potential. Economic downturns are temporary; recovery follows, and there is much to look forward to.Trade will pick up, leasing will get back to normal levels, and the house market will trend upwards once again – downturns come, but they also go.

Getting through the recession

We are indeed in a tough economic climate, with inflation and the cost of living squeezing both consumers and businesses. Yet, history shows that after tough times, better days always come. The recent reduction in the OCR to 5.25% signals that the clouds might finally be clearing. Interest rates are already following suit and my call, at least, is that our economy will be looking quite different at the end of the year than when we started.

Right now, consumer confidence is low and people are, understandably, holding on tightly to their money, making more considered choices when it comes to spending. This is reflected in retail spending levels which we have been falling in the last few months. Despite this, certain retailers, like youth-oriented and activewear stores, are holding strong, and there are signs of positive trading days emerging across the board, especially on weekends. Foot traffic is on a steady climb.

The biggest challenge I see for Kiwi businesses right now is cash flow. Small businesses, particularly, have been tightening their belts and reducing costs. There won’t be many, but those who haven’t already spoken to financial advisers or their banks (and or IRD) really need to. It’s always best to front foot cash flow issues. Communication goes a long way to maintaining positive relationships when it comes to financing and debt – and there is still a fairly long runway before we get to the annual trading peak of summer and Christmas.

Tackling crime

Although it might not seem like it from the headlines, at a local level in Newmarket we are seeing crime trending down month on month. June 2024 saw 33% fewer incidents than the same month last year. Newmarket’s crime rates have fluctuated over the years, but the current decline is a great sign that other regions may start seeing some changes soon too.

This positive trend in Newmarket is largely due to the proactive interventions that have been put in place. A real game changer for us was the establishment of Newmarket Security in early 2023 and investments in advanced tech, including upgraded CCTV networks and automatic number plate recognition systems that  alert our team of stolen cars entering the precinct. Moreover, I’m eager to see what comes from the government’s new Ministerial Advisory Group on retail crime. Be it more resources for businesses and associations like us or if it leads to policy changes, it’s high time we got retail crime under control in New Zealand.

For town centres that don’t have the resources to invest in tech, building relationships with key stakeholders is vital to combating crime. Retail businesses sharing intel with neighbouring businesses will quickly see everyone on the same page and know what to look out for. Security providers have access to crucial intel and can be onsite within minutes, so ensuring that different providers work closely together and share information with the police can go a long way to keeping our communities safe. This has been a huge part of our success – sharing information, rapidly and in real time.

Laying the groundwork

Regardless of your political leanings, the budget announcement earlier this year set a clear direction for the Government’s fiscal strategy. The budget provided a sense of economic confidence, outlining a roadmap for education, regulation, infrastructure and how the Government will stimulate the economy.

Auckland is nearing the completion of several major infrastructure projects. We’re 16 months away from the City Rail Link (CRL) being operational. In early 2026, we’ll start to see trains finally unlocking access to the city. But, it’ll be crucial that Kiwirail, AT and OneRail are walking in-step to deliver a fast, reliable, frequent and affordable service. Every. Single. Day.

When the CRL goes live, there’ll be no more dress rehearsal – they have to get it right. They must show Aucklanders that the investment of our rates and tax dollars, coupled with the endless frustrations we have all experienced with public transport – namely delays/shutdowns/overheated tracks etc, has been worth it.

We’ve faced economic downturns before and we’ve come through the other side. This time will be no different. Sometimes it’s hard to get out of the gloomy mindset painted by the headline, but if we keep buckling down and get through the next few months, things will, and are, getting better.