'People are on the brink of closure' - Tairawhiti forestry decline hits local economy

Gisborne businesses are struggling, with many on the brink of closure.

Shop owners told RNZ they have seen a huge reduction in the number of people in their stores, which is being driven by several factors including a decline in forestry and lower export prices for meat and timber.

There have been job losses, with unemployment rising 1.2 percent and the region's GDP falling by 0.3 percent.

Even though Gisborne's construction consents are up 40.8 percent due to the cyclone rebuild, its residents say the money is not evident in the local economy

Forestry makes up 32 percent of the region's tradeable activity, but forestry harvesting has already ground to a halt in some areas of Tairawhiti - part of the fallout after the district was hit by devastating cyclones Hale and Gabrielle last year.

Jenna McGuffog owns the clothing store Evolution on Gladstone, which she opened nine years ago.

"This has definitely been the hardest winter," she said.

She said the stress of it all was taking its toll.

"Definitely over the last couple of weeks emotionally it's taken its toll on me. You carry it with you, you take it home with you - every day after work... you start to question everything that you're doing," she told RNZ.

She is not alone. Around the corner is homeware store The Workshop, where owner Amy Moore is facing the same problem of no customers. She said her store survived the pandemic, but the situation was now dire.

"Everyone just stopped shopping - it's been really hard and this year is probably the worst it's ever been.

"It's the same for everybody especially in small retail. It's really hard, you leave at the end of the day and you either cry or laugh - it's just disheartening," she said,

It is also having a real impact on her. "Mentally it's draining because you start to think what's the point anymore? You've got a beautiful store with all this amazing stuff and nobody comes in," said Moore.

Forestry decline pumps the brakes

The economic downturn is a problem that Gisborne's Chamber of Commerce president Ashley Fisher is worried about.

"People are on the brink of closure, that's the reality that they're dealing with," he said.

Fisher said a key reason for the big reduction in retail spending was the decline in forestry which employed huge numbers of locals, so there was a lot less expendable income in the region, compared to other years.

"With forestry having a significant downturn at the moment because they are unable to operate or unable to move forward with certainty... they are cutting back and that's flowing through into the rest of the economy," he said.

To get the economy moving, he said the Chamber of Commerce had been working with the council to improve the consenting process, because tighter regulations were hampering the economy.

"Things are slowing up or have slowed up to the point where people can't move forward," said Fisher.

Some businesses have left Gisborne's CBD for other reasons, such as the rising number of homeless people and boarded-up shops.

McGuffog said this was deterring customers.

"Some people are to be honest a little scared to come to town because you have the homeless people around," she said.

The struggling economy and rising number of homeless was something residents are well aware of, with one local women telling RNZ that it had become much worse lately.

"We are having a lot more homeless on the streets and as we saw this morning, we walked under the bridge and saw a kid sleeping under the bridge," she said.

Gisborne District Council told RNZ it has observed a visible increase in the number of homeless people in Tairawhiti and was gathering information to better understand the cause of the rise.

"Economic challenges, such as the increasing national cost of living and unemployment, may be contributing factors. While council's role in addressing homelessness is primarily focused on compliance, we are working with partners to understand the issue and support the development of a regional approach," they said.

Council director of sustainable futures Joanne Noble said they were working with the Chamber of Commerce to help improve the understanding of the consenting process and ensure everyone's economic goals were aligned.

"Council provides funding to Trust Tairāwhiti towards the delivery of our economic development and regional tourism functions on behalf of Council and our communities -supporting business to thrive is one of their key priorities.

"We are updating our resource management plan (the Tairāwhiti Resource Management Plan) - one of the drivers for this review is to enables activities that contribute positively to Tairāwhiti and help achieve our community outcomes," she said.

There is also a review of how the Local Alcohol Policy applied to sensitive sites.

But retailers told RNZ that the biggest help would be people checking out their local shops, instead of shopping online from overseas stores.

"Just visit your local retailers and see if they've got what you want instead," said Moore.

Because it might just help them keep the doors open.