CEDA livestream on economic impacts of COVID-19.
Mostly told what we already know but some figures and interesting predictions from leading economists:
Tourism/hospitality sector the worst hit and will impact GDP by 15%. International visitation will collapse for several years so internal tourism will be important and likely as Australians may be nervous about going overseas.
General spending expected to fall 20%.
Business investment being delayed until there are better times. Business confidence below GFC levels.
NSW and Victoria the most vulnerable states. WA will have some protection due to resources and agriculture.
Labour market impacts and job losses will not be short term as it will take some time to reabsorb workforce.
Likely to see permanent societal changes – more working from home (at least some of the time) and this may force workplace restructures to save money. Commercial office demand expected to fall significantly.
Spending will continue to be discretionary for the foreseeable future, particularly with high levels of average household debt. Real estate prices will fall.
We can also expect more nationalistic decision-making in spending which will lower imports and focus on local products, supply chains and holidays.
The workplace will not be the same post Coronavirus. A return to work with a vaccine could prompt a second wave of illness and lockdown – everyone knows and will be careful with their money.
2020-21 Q2 will see a sharp contraction, probably by more than 10%. US will contract even more.
China’s recovery will aid Australia due to resources but with Western markets, China demand for resources will fall away.
Migration could be a key to boosting the economy but will require skilled workers with their own financial resources. (Probably UK).
Source: Regional Development Australia. https://www.rda.gov.au/