More evidence of the slowdown gathering strength across the economy with the Australian Bureau of Statistics revealing that 66% of Australian businesses have felt some impact from the COVID-19 pandemic and its fallout on demand.
In addition to the survey, data yesterday from the Bureau on the February trade account showed a clear sign of the pandemic hitting domestic demand with imports at a 22 month low in February.
And the monthly ANZ jobs ad series showed a month on month slump of more than 10% in march.
In the second special survey looking at the impact of the pandemic on the economy, the ABS said two thirds of Australian businesses had reported that their turnover or cash flow had reduced as a result of COVID-19.
Nearly half (47%) of businesses made changes to their workforce arrangements as a result of COVID-19. For some businesses this included temporarily reducing or increasing staff working hours, changing the location where staff worked (including working from home) or staff being sent on leave.
Two in five businesses (38%) have changed how they deliver their products or services, including shifting to online services. Over a third of businesses have renegotiated their lease and rental arrangements and a quarter have deferred loan repayments.
Given that its no wonder that imports have fallen. The 4% drop took the level back to April 2018, while the 5% drop in exports took them back to September 2018 levels.
That saw the trade surplus for the month fall 8.8% to a seasonally adjusted $4.36 billion (the less volatile trend series of figures have been suspended by the Australian Bureau of statistics because of the extreme volatility associated with the pandemic).
Exports totalled $37.760 billion, a 17 month low and imports $33.4 billion, a 22 month low and the best indication of the dramatic slowing in domestic demand.
On the export side the travel was down $780 million, or 14% and was the largest single fall in export related income.
Exports of iron ore fines were down $421 million or 8% in February. Export volumes fell 9% in the month. That’s the ore type liked by Chinese steel mills.
Lump iron ore exports (sold mostly outside China) fell $282 million, or 13% with volumes down 15%.
Exports of liquefied natural gas (LNG), fell $224 million (5%), with quantities down 15%.
Shipments of metals (excluding non-monetary gold) were up by $151 million in the month.
Exports of non-monetary gold fell $332 million, or 23% (that is normally a volatile category). Rural exports fell 7% of just over $300 million
Imports of consumption goods fell 8% in February or by $701 million. Imports of capital goods fell 7% or $415 million, a sign that business investment weakened.
Those two figures tell us that there is going to be an awful lot of pain in coming months for a lot of Australian businesses.
Meanwhile, the impact of the coronavirus pandemic is now starting to be more clearly across the economy in other areas. Last Friday it was as 17.9% fall in car sales in March.
Yesterday it was in the ANZ’s monthly measure of job ads suffering a 10.3% drop in March.
The fall was the largest since January 2009 in the depths of the GFC. It equates to the loss of 15,625 ads in a single month or more than 500 a day.
The ANZ survey shows that its measure of job ads is now down by 18.2% over the past year.
The fall took place before the Morrison government announced its $130 billion JobKeeper wage subsidy policy that is set to be approved by the Federal Parliament later today.
April’s fall will be even larger, judging by the figures Seek.com revealed on Monday when it withdrew its current earnings guidance.
Seek said revenue for its core Australia and New Zealand business slumped 40% in the week ending March 22, and was down 60% the following week.
ANZ senior economist Catherine Birch said the fall took place largely over the second half of March as the number of coronavirus cases increased and measures to curb its spread were put in place
“There are some areas where demand for labour may have increased, including health care, supermarkets, and some parts of manufacturing and financial services,” she said
“But overall, demand for labour is likely to pull back further as the shutdowns continue.
Prior to the JobKeeper payment announcement, we forecast that more than 1.1m workers could lose their jobs and the unemployment rate could rise to a peak of 13% in Q2 from its current 5.1%.
“However, we think the JobKeeper payment will keep more workers employed and reduce the peak in unemployment – the economic version of “flattening the curve”, the ANZ said in its commentary.