A first evaluation of business activity in Australia during the COVID-19 crisis

The Australian Bureau of Statistics released its business health indicators to measure the economic impact of the COVID-19.

The figures show a diffuse and moderate impact, in the sense that companies are widely affected by the crisis, but the vast majority of them continue to operate in slow motion. The impact remains heterogeneous, with non-essential sectors and medium-sized companies being the most affected.

 

Businesses in slow motion but few closure

The ABS (Australian Bureau of Statistics) released on April 7th the main business health indicators up to April 3rd. The main conclusion of these figures is that the effect of the COVID-19 crisis on companies is very diffuse and moderately severe.

Diffuse because almost all companies in all sectors are negatively affected, moderately severe because the country has relatively few closures but businesses are still operating at a slower pace.

The majority of companies therefore continue to operate. As of 3 April, 90% of Australian companies were still open. Among them, 66% reported a reduction of their turnover. This results in a slowdown in operations, particularly in terms of hours worked. As a result, 47% of companies have made changes to their payroll. Those changes consisted mainly of a reduction of hours worked (25%), the use of forced paid leave for 11% of firms and unpaid leave for 9%.

Overall, 10% of companies have therefore closed their doors, 48% are operating normally and 42% are operating in slow motion. This also means that some of the companies which experienced a reduction of their turnover did not take measures to reduce their labour costs.

 

A heterogeneous impact depending on sector and size

“Non-essential" sectors are by far the most affected. Unsurprisingly, art and culture are suffering the most from this crisis with only 47% of companies still in business. Media (65%) and hotels & restaurants (69%) complete the triangle of sectors with an activity rate below 85%. In contrast, some sectors are relatively unaffected or have even increased their activity.

Among health and food retail companies (including supermarkets), 9% increased the number of hours worked. This coincides with the announcement by the country's two major supermarket chains of a multi-billion dollar increase in sales.

In addition to industry heterogeneity, there is a deferred impact according to company size.

Medium-sized companies (20-199 employees) are the most affected. For instance, 41% of them have reduced the working hours of their employees, against 25% for those with less than 19 employees and 34% above 200.


Sources: Ambassade de France en Australie [FR] / Australian Bureau of Statistics [EN]

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