Coronavirus economy remains difficult to read

An almost empty Adelaide Central Market this week. Picture: AAP

Passenger vehicle sales fell 25 per cent last month, underlining fears the Australian economy is on a slippery slope down.

The latest reading from NAB suggests business conditions since February have worsened and are set to fall fast.

Its next business pulse-take comes out in the middle of April, just after Easter, but outside some sectors like supermarkets and specialty food the readings are uniformly negative.

A drive around CBD Melbourne will reveal construction is still moving, helped further by a slight relaxation of Melbourne City Council rules.

But if we move into further restrictions that sector could be hit hard.

Pathology is doing well, as are courier trucks, for the moment.

But Westpac’s Bill Evans is forecasting a 0.7 per cent fall in GDP in the March quarter followed by an 8.5 per cent fall in the June quarter before bouncing in the December quarter to be up 5.2 per cent.

The June quarter will be the worst, according to Westpac figures, and NAB’s Alan Oster sees similar trends.

The fear is they are wrong and it doesn’t bounce.

Right now Dan Murphy is booming, up 30 per cent year to date as liquor sales skyrocket with pubs closed.

Lucky for Bruce Mathieson that Woolworths rejigged the ownership of its liquor in February to give Mathieson 15 per cent of the combined group instead of 25 per cent of the pubs.

With the pubs closed he would have had 25 per cent of nothing, but instead gets 15 per cent of something.

Bank of America’s David Errington figures Coles and Woolies are growing second half sales by 13 per cent and earnings by 25 per cent, making the sector the standout in an otherwise plummeting economy.

That suggests the supermarket boom may be short-lived, albeit on a higher base because more people are eating at home.

The bottom line is with the impact of the virus due to peak in May-June that is about when the economy will also be in the ditch.

It depends on the virus whether the economy picks up any time soon.