This time, numbers will be much higher and that will take some getting used to.Īnd the degree and speed of reopening that can safely occur, avoiding problems in the hospital system, when vaccination rates are 70% and then 80% may be limited as at these levels there will still be many who haven’t been vaccinated. Back then the number of COVID-19 cases had fallen to zero or around there. There’s a sense that Australia is being left behind.Įven when reopening comes as vaccination targets are met, it will be very different to last year. There are also psychological costs of lockdowns too.Īll this bad news is hitting when over developed nations are reopening thanks to being further ahead in vaccinations. That’s why the economy is expected to go backwards by about 4% this quarter.

Our rough estimate is that the lockdowns since late May are costing the economy around $28 billion in lost output. This has led to various hard lockdowns, notably in Sydney and Melbourne, which are likely to extend well into October. Locally acquired coronavirus cases have surged, driven by big jumps in New South Wales, and cases in Victoria and the Australian Capital Territory. Since the end of June, the news flow has been bleak. The big positive was a huge return of capital to shareholders, with 89% of companies raising or maintaining dividends driving a record dividend payout of nearly $40 billion, and over $20 billion in buybacks. Around 75% of companies reported higher profits.

The official economic figures were consistent with the June half year earnings reporting season, where listed company profits rose nearly 50% last financial year, helped along by resources and banks. Stocks and net exports detracted from the final figure. Domestic final demand rose a strong 1.7%, with consumer spending up 1.1%, business investment up 2.3%, dwelling investment up 1.7% and public demand 1.9% higher. The June quarter saw GDP rise 9.6% from the lockdown depressed June quarter of last year, but quarterly growth slowed to 0.7%, quarter-on-quarter. The lockdowns and restrictions mean the current quarter is likely to contract by around 4.0%. The change in outlook, of course, reflects the lockdown along the east coast of Australia and the large number of COVID-19 positive cases in the community. There was a metaphorical sigh of relief about the better-than-expected outcome, and likelihood that Australia had avoided a double dip recession. Three months ago, if the government and economists were told that the economy would grow by 0.7% during the June quarter, they might have been disappointed.īack then the employment market was picking up pace, big sectors of the economy such as construction and retail were enjoying a government assisted spending boom, and the main concern on the horizon was the potential for inflation.įast forward to last week when the Australian Bureau of Statistics (ABS) released the Australian GDP growth figure for the June quarter, which actually came in at 0.7%.

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