Statistics show coronavirus’ mounting toll on economy

Empty roads on approach to the Sydney Harbour Bridge in Sydney. Picture: AAP

Incredible statistics about the slump in the Australian economy are now emerging. In the last two weeks in March and at the start of April Australians have experienced the sharpest peace time economic slump since federation. While most are looking at infection rates and possible recovery, the personal horror and fear of the last three weeks will last with ordinary Australians for a long time.

The current generation has never experienced anything like it.

And exactly the same sort of collapse has occurred in the US economy, except that America has a much higher infection rate

Let’s go back to the balmy days of first two weeks in March, 2020. The summer of bushfires had receded and Australians were getting ready to rebuild communities. Roy Morgan Research showed unemployment dropping and the ABS which undertook most of its unemployment surveys in the those two weeks has announced a steady March unemployment rate at 5.2 per cent reflecting that time.

But Roy Morgan has surveyed the final two weeks of the month and discovered that unemployment more than doubled, with an extra 1.4 million Australians out of work.

Translate that Morgan trend to ABS numbers and the unemployment at the end of March was between 10 and 12 per cent. There is also a sharply increasing number of people who are underemployed.

That unprecedented unemployment boost happened in just two weeks. Unfortunately, business in the first weeks of April has not improved.

CBA credit and debit card spending indicates a massive 20 per cent fall in spending over the week to April 10 compared with a year earlier. Some of the segment falls are staggering with spending on clothing down 58 per cent, transport down 44 per cent, personal care falling 61 per cent and spending on recreation down 37 per cent.

The biggest annual declines are in Victoria and NSW. Our two largest states have more exposure to hard hit services.

Cooped up in their homes, eastern state Australians no longer needed toll roads. The toll road decline actually started in the week ended March 15 with Transurban reporting Sydney and Brisbane light vehicle traffic down around 10 per cent while Melbourne fell 21 per cent. But then came the horror last two weeks of March and the Sydney’s decline ballooned to 42 per cent and Melbourne slumped by 54 per cent. Brisbane was down 39 per cent.

In the first week of April the decline rates stabilised. This staggering fall in toll revenue is without precedent. Large vehicle traffic held up better and was down around 13 per cent in the three capitals in the last week of March

But it could be worse. Transurban reports its US toll traffic is down almost 70 per cent in the first week of April.

Other statistical illustrations of the unprecedent slump include:

•The Westpac/MI consumer sentiment index dropped by 16.3 points to 75.6 in April. This was the biggest monthly decline in the 47 year history of the survey and takes the index lower than the readings reached during the GFC.

•The Westpac/MI time to buy a dwelling index collapsed to levels last seen around the time of the GFC suggesting that on balance consumers see it as a bad time to buy property. If this keeps up dwelling prices will fall in the coming months.

•NAB’s March business confidence and conditions survey saw the largest fall in business confidence and conditions since the survey began — well over the GFC rate.

The government hopes JobKeeper will reverse the trend. It’s a very large package but it needs to be, and the money is nearly a month away.