Nigel Tutt Chief Executive of Priority One

Readers will have been following the government's Covid alert levels with interest lately, and some may ponder what impact this will have on our local economy.

Typically, a one-week Level 2 lockdown would not have a large effect on the Western Bay economy. Level 2 will restrict retail, hospitality and accommodation businesses but they can still trade. Customer demand will be a little lower as we'll have fewer visitors, and none from Auckland, and while these disruptions can have a significant effect on a small business, the impact on the wider economy is fairly muted as all other industries can keep operating normally.

This time, however, is a little different, with many events and conferences planned for this week forced to cancel. This will have an effect on the organisers and the many smaller businesses that operate around them.

If we take the loss of international cricket this Sunday as an example, the great team at the Bay Oval will miss out on a sell-out crowd, while many accommodation, hospitality and retail operators will forego income that they would have been counting on.

On top of that, we'll miss out on the public euphoria we get from walloping the Aussies on our home ground. The same goes for netball, where two international games were scheduled for Saturday and Sunday. The loss of some of these games from what is anticipated to be a Level 1 Sunday will also leave a sour taste in the mouths of many.

The financial downside of this is hard to estimate because it is extra to what we would expect from week to week. I would expect retail spend to be down by around 3-5 per cent on what it could have been, which is worth several million to locals.

While this is not large in the grand scheme of things, it's important to the many businesses that are reliant on large events. The intended short duration of this lockdown is also important, as it won't have an effect on longer-term factors like unemployment.

While Level 2 causes us some problems and inconvenience, we should be grateful we are not in the same situation as Auckland or many places in the world, and a conservative approach has served the country well so far. Most importantly, we can return to normality quickly. The fundamentals of our economy are still strong.