Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter

COVID-19 side effects to hit 86% of businesses

Half of Australian businesses have already been hit by the economic fallout from the coronavirus outbreak, with approximately 86 per cent expecting to face adversity in the coming months, new ABS data has revealed.

The Australian Bureau of Statistics (ABS) has released new research that sheds light on the impact of the coronavirus (COVID-19) outbreak on the business community.

The research – which involved a survey of 3,000 businesses between 16 March and 23 March, prior to the introduction of new social distancing restrictions that came into effect on Tuesday (24 March) – has found that just under half (49 per cent) of respondents have been adversely affected by the pandemic.

Of those businesses affected by the outbreak, 82 per cent said a reduction in local demand for their products and services triggered a decline in business activity, while 39 per cent said they were impacted by staff shortages.  

The industries most affected by the crisis during the survey period include accommodation and food services (78 per cent), arts and recreation services (73 per cent), and the retail and wholesale trade sectors (70 per cent).

Advertisement
Advertisement

Looking ahead, approximately 86 per cent of all surveyed respondents said they’re expecting the outbreak to impact their business in the coming months, with a reduction in local demand (80 per cent) and staff shortages (60 per cent) the primary sources of concern.

The release of the ABS data follows a wave of new measures introduced by the federal government and the Reserve Bank of Australia (RBA) to cushion the economic blow of the coronavirus outbreak on the business community.

Earlier this month, the RBA’s monetary policy board decided to cut the official cash rate to a new record low of 0.25 per cent, commence quantitative easing and launch a new $90-billion term funding facility for businesses. 

Following the RBA’s emergency cut, the Morrison government announced it would inject up to $15 billion in funding to support lending to consumers and businesses.

Most recently, the government announced a new coronavirus SME Guarantee Scheme and an additional $66.1 billion in fiscal support for businesses, casual workers, sole traders, retirees and welfare recipients.

PROMOTED FEATURES


The banking sector also moved to provide relief to business, offering repayment holidays of up to six months on business loans and residential mortgages for affected customers. 

However, despite these measures, analysts continue to forecast at least two consecutive quarters of negative GDP growth and a sharp rise in the unemployment rate.

ANZ Research senior economists Cherelle Murphy and Catherine Birch have said stimulus measures would make an “important difference” but would not “offset the economic consequences of the pandemic”.

AMP Capital chief economist Shane Oliver has told Mortgage Business that he expects the unemployment rate, which currently sits at 5.1 per cent, to double, hitting at least 10 per cent before an economic recovery. 

[Related: Outlook darkens as housing market headwinds mount]

COVID-19 side effects to hit 86% of businesses
COVID-19 side effects
mortgagebusiness

Charbel Kadib

Charbel Kadib is the news editor on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

The major bank has confirmed reports that it has identified 200,000 accounts with incorrect balances that may have led to customers accessin...

The interim CEO of the bank’s institutional arm has announced his retirement, while the bank has made an internal appointment to the role ...

The major bank has partnered with a crowdsourced security company to establish a “bug bounty” cyber security program. ...

FROM THE WEB
podcast

LATEST PODCAST: Responsibilities and responsible lending

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.