Mr Patterson, of Arrowtown, said "at the headline level" the district’s economy looked like it was booming, "but it’s pretty scratchy and grumpy beneath the surface".
He noted it was a situation mirrored throughout New Zealand at present — Queenstown Lakes was "just being puffed up by, as always, much faster growth".
While headline economic growth in the district was at 5.9%, coupled with the population increase the district was "going back by a couple of percent".
"If you’re a business that thrives on volume and you don’t really care about your margin, because you get that through thick and thin, then you’re doing well.
"But if you’re a business that relies on eeking out a margin, you’ve got a lot of cost pressures coming in, you’ve got consumers that are really reluctant to spend at present, you’re not able to pass on your price increases, and many people are having the beer and chips, but not staying for the pizza and dessert."
Mr Patterson said the economic crunch was being felt across all industries, including construction, due to fewer residential resource consents coming through.
The high levels of building activity in the district were due to commercial consents, along with the legacy of huge numbers of residential consents processed in the past couple of years.
"But the pipeline of homes that have been consented is not looking as great for the year ahead," he said.
The situation was driven by high interest rates, increasing from less than 3% to more than 7%.
If a household had a $1 million mortgage, that resulted in a $40,000 jump per annum in interest accruing, or $800 a week.
Simultaneously, inflation remained high.
"We’ve still got prices lifting, on average, by 4.5% or so per annum in New Zealand."
Of concern for Queenstown, the per capita recession was also being seen in Australia.
"As Queenstown folk, well, the Aussies are almost as important as the Aucklanders to us.
"The two biggest shows in town are reluctant to spend and we’re seeing that coming through in some of the visitor spending statistics.
"The one shining light for us is the American market at present. It’s rising astronomically fast and that’s an absolutely wonderful story, but only if you’re the type of business that appeals to American travellers."
However, Mr Patterson anticipated interest rates would begin to come down within the next year or so, and inflation was also coming back, which might result in consumers being less reluctant to spend.
He encouraged businesses to take a slightly smaller dividend cheque in the short term and continue to invest in their business if possible.
"Some businesses just can’t do that ... but for those that are in a position [to] ... it’s something that sets them up for the long run."
