Another COVID-19 lockdown to put firms on the brink, cost 155,000 jobs

As NSW races to control a COVID-19 cluster, the stakes for 155,000 workers are high.

Pubs and clubs would be among the businesses hit hard by severe new restrictions should the northern beaches COVID-19 cluster turn into a third wave. Picture: Getty Images

As NSW races to control a cluster of COVID-19 cases in Sydney’s northern beaches, the stakes for workers in industries most exposed to a possible round of renewed restrictions are high, with 155,000 jobs potentially at risk.

Gladys Berejiklian has asked northern beaches residents to stay at home for three days in a bid to contain the outbreak amid warnings any return to stage-three lockdowns would hinder the economic recovery, cost jobs and trigger business closures.

Analysis by IBISWorld shows 17,600 enterprises across 19 industries in the state are considered to have a “very high” exposure to the reimposition of restrictions.

In Victoria, the stage-three measures in early August to suppress the second wave relied on mandatory “stay at home” orders which identified only four reasons to be out: shopping for food and ­essential items; care and care-giving; daily exercise; and work and study, if unable to do so from home.

Stage three for businesses ­reduced cafes and restaurants to offering takeaway and delivery while personal services industries, including gyms, hairdressers, casinos, cinemas and hotels, pubs and clubs were devastated.

IBISWorld senior analyst James Thomson said a return to stage-three lockdowns for NSW “would have a significant impact on the economy, hindering the state’s economic recovery”.

“Many small businesses struggled through earlier lockdowns and a return to tighter restrictions would likely lead to further job losses and business failures, ­particularly among smaller businesses,” he said.

 

Mr Thomson said that the international border closures had already removed a key market for accommodation providers, who now faced losing business over Christmas. “Lockdowns could also delay plans for international travel bubbles, with airlines facing further demand disruptions,” he said.

The economic impact of an isolated cluster in Sydney‘s northern peninsula would be dwarfed by the potential hit to national GDP should the fewer than 30 cases on Friday afternoon explode into a second wave and trigger city or even statewide social distancing.

As state and territory leaders scrambled to reimpose border restrictions, AMP Capital chief economist Shane Oliver calculated that a Victorian-style lockdown could knock $12.5bn, or 2.5 per cent, off national GDP, primarily in the March quarter.

“There are reasons for optimism that this will be avoided and that if there is a lockdown, it will be much shorter than the three months or so seen in Melbourne,” Mr Oliver said. “As such the economic impact will be much smaller and not enough to derail the Australian economic recovery.”

ANZ senior economist Catherine Birch was also hopeful that NSW’s success in containing previous outbreaks would limit the spread of the disease.

Ms Birch said a strict lockdown of Sydney would inevitably have flow-on effects to the rest of the economy.

“If that does happen, one of the positives from the shutdown in Melbourne and Victoria was that it didn’t have as much impact as expected on the national economic recovery,” she said.