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Speaker 1: Now we've been talking about the Real A Pair Who District,

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Speaker 1: the fact that it's been dealt a huge blow with

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Speaker 1: today's announcement that Winstone is going to close two mills

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Speaker 1: in the region. Around two hundred and thirty workers are

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Speaker 1: set to lose their jobs and the mayor Western Curtain

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Speaker 1: is gutted. The government wasn't able to broker a deal.

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Speaker 2: This is a big hit, Heather. I've had ups and downs,

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Speaker 2: as you know, but this is a big hit. I'm

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Speaker 2: really taking a personally to these companies seem to be

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Speaker 2: milking the system and then when it gets to you know,

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Speaker 2: paying it back to the communities or if not, these

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Speaker 2: businesses that they're working hard on our behalf. It just

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Speaker 2: doesn't add.

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Speaker 1: Up infora metrics principle Econos. Brad Olson is with us.

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Speaker 3: Now, Hey, Brad good evening Brad.

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Speaker 1: What proportion of the economy and the re A Pair

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Speaker 1: Who were these two mills?

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Speaker 3: Look, it was a substantial proportion. Around about three and

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Speaker 3: a half percent of Real pay Who District's entire workforce

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Speaker 3: was employed at the mill, So it is a substantial hit. Now,

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Speaker 3: of course it's not just that three point four four

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Speaker 3: percent of total employment directly, but it's all the other

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Speaker 3: businesses in real pay Who that supported those meals with

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Speaker 3: various you know, supply and similar So there is a

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Speaker 3: much wider challenge coming through I think important as well.

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Speaker 3: When you look through the numbers, we can see that

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Speaker 3: already over the last year, up until June, there was

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Speaker 3: a two point three percent fall according to our analysis

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Speaker 3: sative metrics of fuel jobs and all pay WHO. So

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Speaker 3: those jobs figures were already coming down. It's tougher now

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Speaker 3: because of the mill closures. You've of course had the

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Speaker 3: uncertainty because of Real pay Who, Alpine lifts, what's been

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Speaker 3: happening on both sides of the mountain. So an already

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Speaker 3: very difficult situation has become even more difficult with those closures.

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Speaker 3: So a big hit to the community and I sort

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Speaker 3: of think it's one of those areas where Real pay

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Speaker 3: Who is likely one of the hardest hit parts of

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Speaker 3: regional and rural New Zealand.

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Speaker 2: At the moment.

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Speaker 1: Yeah, I mean, you've got this, You've got the Tolareo Chateau,

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Speaker 1: you've got the ski fields. At the moment, how does

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Speaker 1: it feel to you? Does it feel like this is

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Speaker 1: a place that's a bit stuffed.

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Speaker 3: I wouldn't I wouldn't say that. I mean, there's still

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Speaker 3: a lot going for the area, but it's quite clear

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Speaker 3: that the operating environment is a lot more differ I mean,

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Speaker 3: it's I think also worthwhile bearing in mind that we

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Speaker 3: do see some of these challenges cropping up across different

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Speaker 3: parts of the country. Real pay who's obviously sort of

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Speaker 3: the post child and really in the thick of it

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Speaker 3: at the moment, but it highlights that where you do

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Speaker 3: have some of those sort of bigger anchor employers in

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Speaker 3: particularly provincial New Zealand, you know, the change in fortune

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Speaker 3: for that anchor, provided that anchor employer, can have a

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Speaker 3: big influence on the wider economy. I think the challenge

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Speaker 3: all the difficulty here is that although you've seen electricity

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Speaker 3: wholesale prices that have come back towards sort of much

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Speaker 3: better positions over the last week or two, hydro levels

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Speaker 3: have come up in similar the fundamentals those for the

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Speaker 3: mills just didn't stack up anymore. You've got the potential

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Speaker 3: for those energy costs despite higher but more importantly commodity prices,

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Speaker 3: particularly for forestry and wood based products, just aren't in

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Speaker 3: a sustainable area. At the moment, and so if you've

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Speaker 3: got low prices that you're getting in high costs that

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Speaker 3: you're having to pay out, those numbers just don't start

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Speaker 3: to stack up. From a this point of view, do you.

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Speaker 1: Think this will be the end of the closures because

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Speaker 1: of energy costs?

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Speaker 3: Not necessarily. I think there's a lot of businesses, particularly

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Speaker 3: in that sort of forestry based area making sort of

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Speaker 3: wood based products that will still be considering. Yes, you

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Speaker 3: might not have those sort of super high rocketing up

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Speaker 3: prices like you had a couple of weeks back, but

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Speaker 3: equally the risk of that hasn't necessarily gone away. If

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Speaker 3: you have again drier conditions as we move through the

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Speaker 3: rest of this year and the hydro lakes sort of

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Speaker 3: you know, we keep using the water and there's not

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Speaker 3: quite as much that comes and replenishes it. If there's

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Speaker 3: still that sort of gas issue that comes through, I

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Speaker 3: think there's a lot of businesses that are probably going

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Speaker 3: is this just one off? For more realistically how many

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Speaker 3: more times might it come through? And can they last through?

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Speaker 3: I mean there are some big operators as well up

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Speaker 3: in the far North. They already lost energy of course

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Speaker 3: because the pylon fell over so there's a lot I

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Speaker 3: think that are probably going. Actually, the business operations are

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Speaker 3: a lot more risky, a lot more costly, and of

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Speaker 3: course that's got real implications for people, not only if

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Speaker 3: they lose their job, but even just over the last

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Speaker 3: couple of weeks, everyone who's been left in limbo. It's

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Speaker 3: a really tough environment out there for a lot of

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Speaker 3: people to.

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Speaker 1: Right it is. Hey, Brad, thank you very much, appreciate it.

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Speaker 1: Brad Olson, infa Metrix Principle Economists.

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