It is rare to see the world change so dramatically in 7 months. As of June, 927,000 Australian organisations had applied for Jobkeeper, and the rules around what we can do in our personal lives can change weekly. All aspects of life have been affected and although the 2020 federal budget has highlighted the nation’s largest deficit in living memory, Australian optimism prevails.
As shown in the ACA Research COVID-19 Recovery Playbook, the second wave of outbreaks significantly impacted consumer confidence through July and August, but the results we have then seen in September and October (off the back of the Federal Budget) hint towards a relatively strong Q4.
We are however waiting for this optimism to filter through to SMEs, with less than half of them expecting revenues to return to pre COVID-19 levels by the end of the year. While business confidence is marginally higher than we saw in August, it remains well down on the same period in 2019.
Despite this, there are some positive signs for business. Despite economists predicting increasing job losses, the headline unemployment rate is still sitting just under 7%, with retail turnover also up of year on year. Similarly, while new car sales remain weak, used car availability continues to fall as consumers work to secure themselves a form of transport that feels more comfortable than a train, bus or tram at this moment in time.
Tracking these metrics through 2020 has shown how quickly the economy reacts to change, regardless of whether that is an increase or decrease in Government restrictions. Whilst we are seeing varying results at this moment in time, we would hope for stronger results in coming weeks and months, as Victoria emerges from its state of lockdown. There will however continue to be peaks and troughs, emphasising the ongoing economic volatility as consumers juggle competing financial alternatives in the lead-up to the Christmas period.
While remaining cautious, we look forward to seeing continued improvement in coming months, as the Victorian economy increasingly returns to a greater level of activity.