Over the past three months, much of New Zealand’s workforce (including the Infometrics team) has become far more accustomed to working from home, and to communicating with clients and teammates via Zoom, Teams, and other platforms.

As COVID-19 has spread across the globe, countries have implemented varying levels of lockdown and travel restrictions to contain the pandemic. It’s hardly a surprise that these developments have led to some seismic shifts in the activity, and share prices, of publicly listed companies in various industries.

Chart 1 compares share price movements since the beginning of 2020 for Air New Zealand, Qantas, Microsoft, and Zoom. These shares are of course traded on different stock exchanges around the world, so in order to make their price movements a bit easier to track, the share prices were indexed to 100 as of early January.

Unsurprisingly, the share prices of both Qantas and Air NZ have taken a battering, losing around 35% and 45% of their value respectively as of mid-June. Microsoft’s share price has been affected by the turmoil in the US (and global) economy but is currently trading around 20% higher than the beginning of the year. As might be expected, Zoom’s share price has, well, zoomed ahead, increasing by more than 220% in the past five months.

Now that domestic travel restrictions in New Zealand have disappeared under Alert Level 1, and as Australia and other countries start to ease their respective travel restrictions, it remains to be seen whether these trends will be maintained. Will airline shares recover some of their losses as travel resumes? Will Zoom’s share price continue its rocket ship trajectory?

At Infometrics, our role is to provide economic analysis rather than stock market forecasts, so we won’t attempt to provide any answers to these questions. However, for us the graph raises some fundamental economic questions around issues such as the size of the air travel industry in the future, or long-term changes in the commuting patterns of New Zealand’s workforce, and the ripple effect that these might have on urban economic growth, residential property prices or employment in various industries.

Although it may not yet be clear what the future holds for the New Zealand economy in many areas, the Infometrics team will be following these and other developments with great interest, and will continue to provide our clients with in-depth analysis and robust forecasts of the trajectory of the country’s economic recovery.