This 6MB download is a zip file containing 5 pdf documents and 2 xlsx spreadsheets. Presentation on COVID-19 and the potential impacts on employment

May 2020Waka Kotahi wants to better understand the potential implications of the COVID-19 downturn on the land transport system, particularly the potential impacts on regional economies and communities.

To do this, in May 2020 Waka Kotahi commissioned Martin Jenkins and Infometrics to consider the potential impacts of COVID-19 on New Zealand’s economy and demographics, as these are two key drivers of transport demand. In addition to providing a scan of national and international COVID-19 trends, the research involved modelling the economic impacts of three of the Treasury’s COVID-19 scenarios, to a regional scale, to help us understand where the impacts might be greatest.

Waka Kotahi studied this modelling by comparing the percentage difference in employment forecasts from the Treasury’s three COVID-19 scenarios compared to the business as usual scenario.

The source tables from the modelling (Tables 1-40), and the percentage difference in employment forecasts (Tables 41-43), are available as spreadsheets.

Arataki - potential impacts of COVID-19 Final Report

Employment modelling - interactive dashboard

The modelling produced employment forecasts for each region and district over three time periods – 2021, 2025 and 2031. In May 2020, the forecasts for 2021 carried greater certainty as they reflected the impacts of current events, such as border restrictions, reduction in international visitors and students etc. The 2025 and 2031 forecasts were less certain because of the potential for significant shifts in the socio-economic situation over the intervening years. While these later forecasts were useful in helping to understand the relative scale and duration of potential COVID-19 related impacts around the country, they needed to be treated with care recognising the higher levels of uncertainty.

The May 2020 research suggested that the ‘slow recovery scenario’ (Treasury’s scenario 5) was the most likely due to continuing high levels of uncertainty regarding global efforts to manage the pandemic (and the duration and scale of the resulting economic downturn).

The updates to Arataki V2 were framed around the ‘Slower Recovery Scenario’, as that scenario remained the most closely aligned with the unfolding impacts of COVID-19 in New Zealand and globally at that time.

Find out more about Arataki, our 10-year plan for the land transport system

May 2021The May 2021 update to employment modelling used to inform Arataki Version 2 is now available. Employment modelling dashboard - updated 2021Arataki used the May 2020 information to compare how various regions and industries might be impacted by COVID-19. Almost a year later, it is clear that New Zealand fared better than forecast in May 2020.Waka Kotahi therefore commissioned an update to the projections through a high-level review of:the original projections for 2020/21 against performancethe implications of the most recent global (eg International monetary fund world economic Outlook) and national economic forecasts (eg Treasury half year economic and fiscal update)The treasury updated its scenarios in its December half year fiscal and economic update (HYEFU) and these new scenarios have been used for the revised projections.Considerable uncertainty remains about the potential scale and duration of the COVID-19 downturn, for example with regards to the duration of border restrictions, update of immunisation programmes. The updated analysis provides us with additional information regarding which sectors and parts of the country are likely to be most impacted. We continue to monitor the situation and keep up to date with other cross-Government scenario development and COVID-19 related work. The updated modelling has produced employment forecasts for each region and district over three time periods - 2022, 2025, 2031.The 2022 forecasts carry greater certainty as they reflect the impacts of current events. The 2025 and 2031 forecasts are less certain because of the potential for significant shifts over that time.

Data reuse caveats: as per license.

Additionally, please read / use this data in conjunction with the Infometrics and Martin Jenkins reports, to understand the uncertainties and assumptions involved in modelling the potential impacts of COVID-19.

COVID-19’s effect on industry and regional economic outcomes for NZ Transport Agency [PDF 620 KB]

Data quality statement: while the modelling undertaken is high quality, it represents two point-in-time analyses undertaken during a period of considerable uncertainty. This uncertainty comes from several factors relating to the COVID-19 pandemic, including:

a lack of clarity about the size of the global downturn and how quickly the international economy might recover differing views about the ability of the New Zealand economy to bounce back from the significant job losses that are occurring and how much of a structural change in the economy is required the possibility of a further wave of COVID-19 cases within New Zealand that might require a return to Alert Levels 3 or 4.

While high levels of uncertainty remain around the scale of impacts from the pandemic, particularly in coming years, the modelling is useful in indicating the direction of travel and the relative scale of impacts in different parts of the country.

Data quality caveats: as noted above, there is considerable uncertainty about the potential scale and duration of the COVID-19 downturn. Please treat the specific results of the modelling carefully, particularly in the forecasts to later years (2025, 2031), given the potential for significant shifts in New Zealand's socio-economic situation before then.

As such, please use the modelling results as a guide to the potential scale of the impacts of the downturn in different locations, rather than as a precise assessment of impacts over the coming decade.

Toll roads and weigh stations play a vital role in freight traffic and are tied to public-private partnerships (PPPs) involving government infrastructure spending. Government actions, like fiscal stimulus and infrastructure investments, helped the industry avoid revenue drops during times of low demand. During the 2020 lockdowns, commercial vehicles kept running, largely due to ongoing e-commerce demand. This sustained demand led to the continued use of toll roads and weigh stations. Federal funding in 2020 and 2021 encouraged government contracts within PPPs, fostering growth as new projects became operational. Private companies collected tolls during this period, aligning with a rebound in travel and consumption. Federal funding bolstered revenue through 2024, as real tolls charged drivers and collected fees from vehicles. Revenue is expected to increase at a CAGR of 7.7% to $6.8 billion through the end of 2024, including growth of 2.8% in 2024 alone. The 2023 freight recession pressured weigh stations and toll roads, which depend heavily on trucking activity to generate revenue. A decline in freight volumes slowed growth since weigh stations mainly manage cargo and ensure regulatory compliance for commercial vehicles. Still, there's a favorable shift with decreasing inflation and rate cuts improving consumer outlook, uplifting freight traffic towards the end of 2024. This change energizes freight activities, indicating stronger growth toward the year's end. Persistent consumer interest in online shopping is expanding logistics services and increasing truck numbers and toll revenues. Businesses took advantage of rising federal funding at the beginning of the period to expand investment into automation, which included adopting cameras and sensors to better monitor traffic and reduce wage expense, supporting the expansion of profit. Recovering consumption post the 2023 downturn is expected to increase demand for delivered products, enhancing spending at weigh stations and on cargo management. Yet, future federal infrastructure packages remain uncertain. Shifts in congressional control might affect highway investments, causing potential revenue volatility. The Congressional Budget Office projects that highway accounts could go negative by 2028 if federal support decreases, casting doubt on toll roads and weigh stations. Technological advancements, like cameras, sensors and automation, are likely, but the pace might moderate as existing businesses often lack the size and funding needed. Industry revenue is set to expand by a CAGR of 2.2% to an estimated $7.6 billion through the end of 2029.

Over 320,000 heavy trucks were produced in the United States in 2022, an increase of about 11 percent compared to the 2021 production volume. That year, just over 3.3 million heavy trucks were produced worldwide.