This article is an updated version of a note first provided to Infometrics clients in August 2021.

The COVID-19 pandemic has brought about some fundamental changes to both New Zealand and the world – including supercharging a shift in working patterns and locations. Working from home first became a necessity during Alert Level 4 in April 2020, and the rush to equip businesses and workers to operate away from the office has sparked a trend that appears here to stay. The latest Level 4 lockdown has doubled down on this focus, as business sought to keep operations going. Offices and urban centres aren’t a thing of the past – not by a longshot. But as our analysis shows, New Zealanders are working, travelling, and spending differently.

Infometrics analysis of public transport use across Auckland, Wellington, and Canterbury shows a 21% drop in use in the June 2021 month from June 2019 levels. With filled jobs, hours worked, and spending activity all above pre-pandemic levels, lower public transport use highlights that people are still definitely working, just in different ways. The drop in public transport use has taken patronage back around a decade, with numbers still recovering but remaining around 30% below 2019 levels throughout the first half of 2021, indicating there’s a long way to go (see Chart 1).

The trend of lower public transport use highlights a shift in working, with fewer people needing or wanting to travel around like pre-COVID. That 21% fall in June compared to 2019 equates to nearly 2.7m trips. Looking across the three major urban regions (and areas with accessible public transport data), Auckland has had the largest fall in use, with June 2021 use sitting at 24% below 2019 levels. Canterbury is in the middle with 16% lower use, with Wellington recovering to be only 14% below usual levels (see Chart 2).

Other regional centres show a more mixed bag, with provincial centres generally doing better, although public transport usage is in general lower in these areas.

Infometrics analysis of this daily public transport data shows that Monday appear to be the most popular day to work from home, or not work at all. Daily public transport data from 2019 onwards from Auckland Transport and Metlink (via Greater Wellington Regional Council) provides an insight into what changing patterns of work mean across the week. In both Auckland and Wellington, Monday public transport usage has fallen the most from pre-pandemic levels.

Correcting for different numbers of each day of the week in each year, Wellington daily data for 2021 shows a 19% decline in Monday patronage compared to in 2019, with the Friday fall of 18% the second-largest decline.

In Auckland, Monday trips are down 37% from 2019 levels, with the 33.6% fall on both Friday and Saturday tied for the second-largest fall.

Having the largest fall in public transport be on a Monday makes sense – it’s a perfect day for a long weekend, as workers opt to work from home on a Monday and ease back into the week.

Slicing and dicing daily patronage data different ways shows a variety of trends around the other days of the week. But the one trend unchanged in every iteration of our analysis is that Monday patronage has seen the largest fall.

It’s not just how we’re travelling, it’s what we’re spending on too that adds to the evidence of working from home.

Spending trends reveal New Zealanders are spending more on home-focused products than before, as they spend more time at home and want to ensure adequate comfort and resources are available.

Allocating spending categories to home, away, or mixed-focused use allows for comparison of spending trends. These allocations highlight that home-based spending rose after the Global Financial Crisis, peaking at 59% of card spending towards the end of 2012. This shift likely highlights households tightening their belts, with home-based spending reflecting a greater proportion of necessity spending (with away-based spending discretionary, like travel, accommodation, and eating out).

Although lockdowns forced home-based spending to spike, non-lockdown spending has still showing a greater focus on the home (see Chart 4).

Even more recent spending shows a higher level of home-based spending. For the first six months of 2021, home-based spending accounted for 57.4% of total card spending. But 2018 and 2019 half-year spend splits never made it above 55.5%.

Detailed data from StatsNZ shows that card spending is on the up, with a 7.1% increase in card spending for the 12 months to June 2021 compared to 2019 – an extra $4.2b.  Most of this additional spend was due to grocery spending, which rose 11% to sit $2.2b higher. Home goods (furniture, electrical, and hardware) were the second strongest, rising 21% to add $1.5b from 2019 (see Chart 5).

Tourism-based spending suffers from the loss of international travellers. Yet the overall increase in spending, and the fact it has been focused primarily on home-based spending, underscores the shift toward spending more time at home.

The increase in working from home is a key trend that will impact regional economic strategies, population trends, local labour markets, and the general economy. Urban areas will need to redefine and invigorate the inner-city experience to attract people back for more than just a meeting. Regional areas will be able to attract more people into their areas with the lure of lifestyle and better affordability and will see spending boosts as people stay around (and spend around) their homes. The labour market more broadly can be more flexible, with access now to a wider range of talent than before as proximity and physical location becomes less important.

People will be more willing to move, with the knowledge that they could work from further away from their traditional employment home base. And the focus on service activity in the economy will rise, fuelling more work on weightless service exports, and increasing interest in some industries.

Working from home appears to be a trend that is here to stay, and understanding, embracing, and navigating the shift will be important to ensure businesses, decision makers, and local areas can address the opportunities and challenges that these changes bring.