Leading industry research company IBISWorld has published an in-depth breakdown of how the COVID-19 pandemic is affecting every subdivision in the economies of Australia and New Zealand. This report, compiled by a team of senior industry analysts, classifies the level of disruption for each subdivision and provides analysis on the key factors that have determined performance over 2021-22, and will affect each subdivision in the years ahead.
Click here to download the IBISWorld COVID-19 Special Report
The ongoing COVID-19 pandemic has significantly affected domestic and international economic activity. Australia and New Zealand have been relatively successful in containing the COVID-19 pandemic compared with other regions. However, supply chain disruptions and ongoing travel and tourism restrictions continue to hinder Australia and New Zealand. Overall, the virus has had a highly damaging effect on economic activity, prompting the first technical recession in Australia since 1991-92.
‘IBISWorld has classified the degree of impact for each subdivision as moderate, high or very high. The level of disruption depends on the degree of exposure to international trade, and the impact on business and consumer confidence,’ said Senior Industry Analyst Matthew Reeves.
The 2021 winter has seen new outbreaks of COVID-19 across Australia, particularly in New South Wales. Lockdowns have become a frequent occurrence across the country. In New South Wales, strict restrictions on leaving the home have been introduced and are likely to extend until the population reaches a vaccination rate of 70% for those above the age of 16. On current estimates, this is expected to occur in late October. Queensland has closed its borders to other states and has recorded minimal local transmission of COVID-19 in recent weeks. South Australia has recorded minimal cases of COVID-19 and continues to impose a light level of restriction on social gatherings.
Ongoing delays in the delivery of vaccines to Australia represents a critical threat to the country’s economic recovery. While Australia outperformed other economies in 2020 by nearly eliminating local cases of COVID-19, the nation is now lagging behind other countries in a return to normalcy through widespread vaccination. The recent acquisition of additional Pfizer vaccines from Poland and the United Kingdom is expected to support increased vaccinations, particularly among young people. Only 38.2% of Australians are fully vaccinated as at 6 September.
In New Zealand, 25% of the total population is vaccinated against COVID-19. The country has administered the fewest doses per capita of any developed nation. New Zealand was largely free of the virus from February to August 2021, but has since suffered a significant outbreak of the delta strain. The rate of new daily cases peaked at 83 on August 29th, but has since fallen to only 20 new cases on 5 September. The outbreak has resulted in a total of 801 infections in the New Zealand community. In response to the outbreak, the entire country was subjected to lockdown restrictions. Restrictions have since eased in areas outside of Auckland, where the outbreak was concentrated. Auckland is expected to remain in lockdown until at least mid-September.
Many households scaled back discretionary spending during the pandemic due to fears relating to rising unemployment and economic uncertainty. Australian household consumption declined by 3.0% in 2019-20, but then grew by 1.4% in 2020-21. In 2021-22, household consumption expenditure is anticipated to rise by 4.0%. Household spending strengthened in the second half of 2020-21, as reopened interstate borders and reduced social distancing restrictions encouraged economic recovery. Many businesses have abandoned or postponed investment in new productive capacity to retain cash and provide a liquidity buffer to survive the COVID-19 pandemic. Private capital expenditure on machinery and equipment declined by 3.0% in 2020-21, but is expected to increase by 5.3% in 2021-22. Supply chain disruptions in Australia, New Zealand and foreign markets continue to hinder business activity, dampening the economic recovery.
Some subdivisions have outperformed during the COVID-19 pandemic. Social distancing has pushed many consumers to online channels for shopping, communication, food purchases and working arrangements. This trend has driven a surge in sectors such as online shopping, postal services, and data storage services. Some industries in the Mining subdivision have benefited from declining operating costs associated with lower fuel prices. Other industries have suffered direct negative effects, but have also benefited from positive factors, such as rising demand for repairs and maintenance services replacing new purchases.
Ratings Methodology
Exposure ratings are determined by assessing an industry’s reliance on international trade, supply chain risks and other industry-specific factors. Ratings are assigned in comparison with the rest of the economy. While almost all industries are experiencing dramatic effects due to the COVID-19 pandemic, IBISWorld’s ratings system will result in some industries being deemed to have lower exposure to COVID-19.
Click here to download the IBISWorld COVID-19 Special Report
Previous versions of the COVID-19 Special Report:
- 4th August 2021
- 8th July 2021
- 8th June 2021
- 11th May 2021
- 24th March 2021
- 16th February 2021
- 22nd January 2021
- 25th November 2020
- 21st October 2020
- 16th September 2020
- 3rd September 2020
- 18th August 2020
- 10th August 2020
- 28th July 2020
- 15th July 2020
- 6th July 2020
- 16th June 2020
- 3rd June 2020
- 20th May 2020
- 14th May 2020
- 5th May 2020
- 28th April 2020
- 22nd April 2020
- 12th March 2020
To stay up-to-date on the latest industry insights from our expert analysts subscribe to our monthly e-newsletter!
For more information, to obtain industry reports or to arrange an interview with an analyst, please contact:
Jason Aravanis
Strategic Media Advisor – IBISWorld Pty Ltd
Tel: 03 9906 3647
Email: mediarelations@ibisworld.com
