Recession news is impossible to miss. Every day, another statistic reveals greater depths to our economic gloom. But when you start to ring people and ask them how their church and community are faring, it’s a different story. Some, particularly in rural areas, say they are yet to see any tangible signs. They wonder if the media is feeding the recession and distrust its coverage. Bad news creates its own momentum, they suggest. Where does the truth lie? Amanda Wells reports
We can’t ignore the mass of negative statistics. A New Zealand Institute of Economic Research survey released in March suggests that the recession will be deeper than first forecast, with firms’ views of their own business activity from January to March 2009 the most negative since the 1970s. Intentions towards staffing levels were the worst since 1991. And while house prices have already fallen more than 8 percent since their peak in mid 2007, the Reserve Bank has predicted a 20 percent plunge between that peak and the end of next year.
If you think these statistics sound scary, consider the global economy. A United Nations survey predicts a global economic contraction of 1 percent during 2009. The Organisation for Economic Co-operation and Development expects global trade volumes to slump by 13 percent this year, and its member economies to shrink by an average of 4.3 percent. US house prices have lost nearly a third of their value since their 2006 peak.
Some anecdotes from around New Zealand paint a picture of cautious Kiwis hedging their bets against what may come. Like having a camping holiday close to home rather than travelling overseas. The Rev Karl Lamb, who’s minister of Lakeside Church in Te Anau, says the camping ground operators in his congregation reported far more Kiwis staying during the Christmas period than ever before.
Some people decided not to holiday at all. The Rev Nathan Parry of Island Bay Presbyterian says his Christmas day service attracted 50 percent more attendees than usual – not because of visitors but because “our own people had chosen not to go on holiday”. Wellington’s large number of government employees are feeling particular uncertainty about the future, he says.
In Dunedin, the Rev Tokerau Joseph of First Church says he can see the effects of the economy on his church. Some people in the Pacific Island congregation have been hit by a downtown in manufacturing and consequent redundancies from big names like Fisher & Paykel and Cadbury. They then face pressure to move away from Dunedin in search of new opportunities, Tokerau says. Younger people are starting to consider looking overseas.
It’s not just those in the manfacturing sector seeing an impact, Tokerau says. Some people in management roles have lost jobs or face an uncertain future.
But people are also seeing an opportuntunity to try something different, like returning to tertiary study or embarking on it for the first time. “Overall folk are trying very hard to see the positive in this.”
Many people prefer not to make their financial situation a topic of conversation, Tokerau says. “But we know that some folk are affected more than others. We keep our ears open and make sure we are available if people want to talk about it.”
Another minister, who preferred not to be identified because of the sensitivity of the situation, said that many in his congregation, in a dairy farming area, were concerned about the current climate.
“It is not a good time. We have our share of those who have been made redundant; they come to you for counselling and have issues that are not only beyond your scope but beyond the resources that are available to help.”
There is an understandable tension between farmers and farm workers in the congregation. “We have the problem of those who have been working on farms being laid off, and then farmers suddenly having to cope with a lot more of the work themselves.”
“When you operate a farm and times are hard, the first thing you do is do the jobs that you can do yourself and reduce the number you employ. When you do jobs that you have not been doing, it takes away from family time, it takes energy, and sooner or later you find you are moving into a stressful situation.” Relationships are put under pressure and some have broken up as a result, he says.
A city minister reports that his congregation had 10 people looking for work; people who had recently graduated, retrained or returned from overseas but were finding the job market tight. This equated to 10 percent of the congregation.
But these negative tales contrast with reports from other, mainly provincial, regions.
The Rev Robyn McPhail, minister of Kaeo/Kerikeri Union Church, says this year has not seen a noticeable increase in anxiety. “We’re not actually talking about the recession.”
Many people in the region already struggle financially on a day-to-day basis, relying on seasonal work and benefits, Robyn says, and the recession hasn’t changed that. “They live on the breadline anyway.”
High petrol prices last year had a more a noticeable impact, she says. “People were running out of petrol all the time and not making it to places.”
The 2008 collapse of finance companies also significantly affected Kerikeri, with a number of elderly people suffering. “We were quietly aware that people had a big change in their financial situation. We’ve had people move away who needed to live somewhere more affordable.”
Some parts of the coast near Kerikeri have seen a property boom, and “there’s an awareness that’s slowing down”. But most people don’t appear to be anxious about their jobs.
Talking to her rural networks around the country, the main topics of conversation are still the weather and people’s health, Robyn says. Most farmers are quietly confident of weathering any difficulties, particularly with the improvement in commodity prices such as lamb.
In Kaeo, the church is rebuilding a hall damaged in the 2007 flood. “We’re aware that what we do in the community sends its own message. We’re not pulling our heads in.”
The Rev Dennis Flett, of Knox Presbyterian in Waitara, says Taranaki’s relative isolation means it’s self sufficient in many respects, and at the moment there’s not a great deal of concern about the downturn. The huge reserves of oil in the area lead to a degree of confidence, and while property prices have remained static, they have not fallen significantly.
Despite being a low socioeconomic area, Waitara has low unemployment. Its freezing works shut eight years ago, with big job losses, but the plant has since successfully reopened to manufacture small goods such as hamburger patties. Most people in the congregation aren’t high income earners, Dennis says, but Waitara is only 13km from New Plymouth and many commute to work in the Bell Block industrial area. He says they’re hearing more about the recession in the media than they’re seeing its effects. “It hasn’t really affected us; we wonder when it will.”
Even though the milk payment is down from last year, it’s still strong compared to previous years, Dennis says, and farmers are quietly optimistic about the long term demand for milk products, particularly in the developing world.
The Rev Rachel Judge in Ashburton is similarly positive. “Everybody is saying Ashburton is not as badly off as other places.”
Rachel says many in the community have expressed concern about media reporting of the recession and its accuracy. A local business leader, who’s also a member of Rachel’s congregation, says conditions aren’t as gloomy as the media is suggesting. Like Robyn in the Far North, Rachel says the collapse of finance companies and the rate of Fonterra’s milk solids payout have had much more immediate effects.
Ashburton has benefited from the dairying boom, with improved job options and low levels of unemployment. Those who have recently converted to dairy are feeling the effects of lower payout, Rachel says, though this may take a couple of years to have an effect on local employment.
“I hear concern from parents of younger farmers who have recently converted.”
There is also some concern from parents that children at university or about to graduate might have difficulty finding jobs.
But being provincial and being farming-based “will help cushion us,” she says. There are still building projects going on and new housing areas being developed.
“People want to refute some of the gloom.”
Te Anau’s the Rev Karl Lamb says at the moment most people
are saying “what recession?”
Te Anau is heavily dependent on the international tourism industry, which so far has been down only slightly. Most people visiting during the current season had booked six months ago, before the extent of the global financial crisis was obvious.
But forward bookings for next year are significantly down. Some people are worried, Karl says, but others are questioning whether the situation is being inflamed by the constant negative media reports. “People are saying a lot of this is because of the media.”
“When I talk to tourists visiting from the United Kingdom, they certainly tell us how bad things are. We really haven’t seen it here.”
The church runs the community foodbank and has noticed a significant increase in donations recently, Karl says. “People are saying, ‘you’ll need it because of the recession’”.
But, in reality, demand hasn’t increased, and the donations are being kept for a time of need.