The strict lockdowns have resulted in a massive drop in demand, but they have also been successful at ‘flattening the curve’ or reducing the number of new daily cases of Covid-19 in both countries. The success means both countries are now moving towards easing the lockdowns. In New Zealand, around 400,000 people without direct customer interaction can now return to work which allows manufacturing and construction activity to resume and restaurant food to be sold for takeaway. In Australia, some states have lifted restrictions on non-essential businesses although there has not yet been any change at the federal level. As lockdowns ease there will be a significant boost to economic activity. Indeed, we expect output to rebound by 3% in Australia and by 10% in New Zealand in Q3. Even so, we don’t expect output to return to pre-crisis levels until 2021 in Australia and 2022 in New Zealand.
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