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Planning For Recovery - The COVID-19 Recovery Playbook

The devastating impact of COVID-19 on the Australian economy is clearly evident (as called out in our COVID-19 SME Sentiment Tracker), particularly as a resurgence of the virus in Victoria sees the state reinstating strict lockdown measures. Looking to the future though, we are hopeful the latest outbreak will be controlled, allowing Australian businesses to shift their focus away from survival, and towards recovery.

Given the unprecedented nature of this pandemic, it is hard to fathom the current state of the economy. We have therefore compiled a list of metrics that can be used to evaluate and monitor the health of the economy. We are making this recovery playbook available as a public resource, and will be updating it on a regular basis (as new data becomes available). 

At a high level, some of the early signs of recovery we saw have now retreated, with consumer and business confidence heading back down. Some specific themes are explored below. 

Confidence

  • While consumer and business confidence recovered somewhat in June, they are weaker again in July off the back of the renewed lockdown in Victoria, and continued outbreaks in NSW.

Employment

  • The unemployment rate is also increasing, with the potential to rise further as access to JobKeeper is tightened later this year.
  • Despite this, job listings are growing aggressively. We are however starting to see the impact of Victoria's return to lockdown.

Retail

  • At an overall level, the retail sector saw a positive recovery in May, regaining the ground lost in April (and also outperforming May 2019). Early data for June suggests that we'll see further growth across the sector.
  • Household goods and department stores particularly stood out for their strong performance (with most others still recovering from significant loss of revenue).

Real Estate

  • Residential sale and rental listings are trending down, and could be further impacted by any changes to JobKeeper and JobSeeker. The drop in mortgages also continued to accelerate in May, as borrowers chose to hold off on entering the market.
  • The significant drop in residential approvals emphasises the challenging road ahead for the construction sector. It is positive though that commercial approvals remained stronger in June, potentially offsetting some of the decline in residential activity.

Automotive

  • Strong new vehicle sales in June (including record Heavy Commercial numbers) have been driven by fleet buyers looking to take advantage of instant asset write-offs. Availability of dealer used cars has also been declining as buyers locked in purchases before June 30.
  • Vehicle finance recovered in May (in line with stronger used vehicle sales). The strong new car results in June should also lead to increased finance activity.

Access the COVID-19 Recovery Playbook

We hope these insights are useful to you during these uncertain times.

James, Ben, and Steve

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