From the Director…
2020 Autumn Update
If you were like me in the Southern States of Australia you’d be forgiven for wondering “where was our Summer?”
The Summer saw a few warm days, but it was our terrible bushfires that headlined Australia’s summer. The rebuild exercise will be the focus for 2020 and will draw on many government resources.
Then the Corona Virus hit. We are still in a travel ban (at present writing), have had our first death in Australia and the economic impact is playing out the world over.
While business would normally get back to business in February, we will continue to see the repercussions of these domestic and international events throughout the year.
What does it mean for business?
Normally the summer and shoulder seasons are busy for travel whether its international travellers coming to Australia or those visiting friends and relatives. With significantly decreased travel, the flow on to tourism, retail, hospitality will see these industries struggle. The iconic Chinatown in Melbourne has seen restaurants that have survived every recession close their doors.
Our Chinese international students have not returned (estimated at over 100,000 students). This has forced our education providers to innovate. Cloud based education is now surging seeing a new mode to deliver education (which has not been without it challenges to access amidst China’s firewalls) – perhaps an untapped need? The Coronavirus is also forcing universities to consider their ratios of face-to-face staff to student numbers. The education sector may see a mass exodus of lecturers, tutors and facilitators or the move to a more technology enabled platform with improved efficiencies.
The broader economy will experience a dip as many sectors rely on China as a global trade partner.
To our domestic market. The rebuild post our bushfires will draw on our government funding. The federal government has already promised $2 billion in the bushfire recovery. To achieve this, the government will be drawing from its pool. Organisations that rely on government funding who are not in bushfire affected precincts can expect to see a reduction in funding in 2020/2021. These organisations will either improve efficiencies or reduce services.
Where Australia will see heightened activity is health, pharmaceuticals and FMCG (The Australian Government activating its emergency plan saw a run on many essentials and pharmaceuticals reminiscent of Y2K) and the bushfires will see the insurance sector increase activity and the construction sector and its supply chain will see a boost late 2020.
Overall, 2020 will see a softened market where organisations will experience less growth. For employees, this will see less opportunity for promotion or training and development. Employers will experience a decrease in hiring, there will be softened wages growth and household spending will reduce. All factors which will see Australia’s already conservative economy, take a dip.