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).
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.
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.