By every account, 2020 has been a strange, disorienting, and difficult year for everyone. The personal challenges have been huge, and for small business owners in Australia, those challenges have only grown as the economy has tumbled in the wake of covid-19.
Almost a year after Australia’s first confirmed case, we have learned a lot about the virus, and have largely managed to keep it under control, especially compared with many other countries.
So as a country that has seen the same hardships as many economies around the world, but has managed to largely stay on top of the outbreak due to careful lockdowns and precautions, how is the Australian economy now?
The early days of the coronavirus in Australia
The early days of the coronavirus outbreak in Australia arrived at a time when the country was already struggling with the very fresh scars of the record-breaking wildfire season. The first set of coronavirus restrictions were only put in place on March 13, yet Thryv Australia research shows that business confidence plummeted from 40 on March 10th, to negative 13 just two weeks later on the 24th.
This was the fastest drop in Thryv Australia’s 25 years of survey history.
During March, 30% of small and medium businesses also saw the value of their goods or services drop, whereas almost half (44%) saw the prices for goods and services from their suppliers increase.
For the first time in 30 years, Australia’s economy was officially in recession.
How is the Australian economy faring presently?
In a nutshell, it could be a lot better, but it could be significantly worse, too.
During the virus’ early days, The Economist predicted that the world would have a ‘90 per cent economy’ after restrictions were lifted, referring to how the economy would fare compared with how it would have done without covid-19. The Sydney Morning Herald highlighted recently that Australia largely fit into that prediction, but fared slightly better than many at 92% of what the economy would have been otherwise.
There was some slightly positive news in October when Reserve Bank Deputy Governor Guy Debelle said that Australia’s economy may have grown a little bit in September. However, this was not a signal of the end of the recession, but a positive sign nonetheless, perhaps as a result of Australia’s largely successful containment of the virus.
In November, RBA Governor Philip Lowe spoke at the Committee for Economic Development of Australia Annual Dinner Address, saying that the pandemic has impacted numerous factors across the economy. He said that the labour market will not likely be at the level of output it was at the end of 2019 until late 2021, population growth is down as the borders remain closed, and vacancy rates in the property market are up while rents and capital values are down.
However, Lowe also added that when it comes to the digitisation of the economy, “progress that otherwise would have taken years has been made in a matter of months”, such as in the areas of telehealth, virtual meetings, and the electronic execution of legal documents.
Not to mention, online sales have increased 80% since the beginning of the year, he said.
Early in the year, the RBA lowered the official cash rate to 0.25%, and has again dropped the OCR to 0.1% in a move to stimulate the economy to help meet the needs of small business owners and of households. The RBA has also recently announced a $100 million bond purchase program, and the Government’s Business Growth Fund is set to provide loans to small business owners across the country in years to come, all in an effort to pick the economy back up again.
Overall, the economy is still undoubtedly in poor shape. However, Australia’s competent handling of the pandemic and current low case numbers, combined with recent announcements of effective vaccines, at least signals some positivity for the future and a chance for small businesses to bounce back.
In the meantime, small business owners can take steps to improve their own connections with audiences and markets at home. White Pages Connect is a simple but effective tool that streamlines the process of updating business details and information across multiple networks, ensuring that at least one thing in 2020 is easy.