[New Video] The Impact of COVID-19 on the Melbourne Property Market in 2020 – By Konrad Bobilak

by | Apr 30, 2020 | property

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Coronavirus in Australia: Industries most at risk of job losses in COVID-19 crisis and the likely impact on the Australian Property Market.

The extent of job losses in Australia as a result of the coronavirus crisis is forecast to be significant, with hundreds of thousands of people already out of work.

Images of long lines of people queuing outside of Centrelink offices across the country, desperate to access urgent welfare payments, demonstrate how the economic uncertainty that’s already hitting hard.

Now, an economics professor has plotted the industries most at risk from the significant economic shock of the coronavirus crisis.

“In February, about 2.7 million workers were employed in the most exposed industries,” Jeff Borland from the University of Melbourne said.

“And while it won’t be possible to know for sure until April 16 when we get data from the Bureau of Statistics on the labour force in March, I believe it’s reasonable to think the jobs of about 900,000 are already under threat.

“The scale and speed of what’s happening is creating the most serious labour market policy challenge of the post-war era.”

In an article for The Conversation, Prof Borland listed the industries most exposed to a coronavirus-induced downturn and the number of workers in each.

At the top of the tally was the hospitality sector with 689,800 workers, where strict social distancing measures mean cafes, restaurants and takeaway outlets can only operate on a pick-up or delivery basis.

Real estate, which employs 130,000 people, is also likely to be hit, with auctions and group open inspections now banned. In addition, the impact of coronavirus on the broader economy is expected to put downward pressure on house prices.

There are some 114,000 jobs in the sports and physical recreation sectors, which Prof Borland said is likely to be adversely affected by government-ordered closures.

The hotel and other accommodation sector will be hit hard too, which accounts for 97,800 jobs.

Pubs, bars and taverns have been forced to close indefinitely – strict restrictions that Prime Minister Scott Morrison warned could be in place for up to six months.

That sector employs an estimated 92,500 people, Prof Borland said.

The Government has urged people to avoid non-essential domestic travel and Australia’s borders are closed to non-citizens and nonresidents until further notice.

The impact on the aviation sector from coronavirus has been significant – Qantas and Virgin have already stood down tens of thousands of workers.

Prof Borland said that 51,700 jobs in the air transport space are exposed to major challenges.

For one group of about 1.4 million workers – primarily in industries involving eating out, entertainment, recreation, accommodation and air travel – the loss of work is the inevitable result of government shutdowns,” he said.

“It has to be acknowledged that there is a lot of uncertainty about what the actual number will be.

“But when you look at the number of people employed in some of the most adversely affected industries – such as the 689,000 in cafes (and restaurants etc) – and recognise how much those industries appear to being affected, unfortunately it’s hard to avoid the conclusion that it is going to be a very big number of people who lose their jobs.”

A second group of about 900,000 Australian workers could also be impacted due to a reduction in consumer spending.

Personal services and non-food retail are expected to be hit particularly hard, Prof Borland said.

About 255,000 workers in the tertiary education sector, particularly English language colleges, are at risk due to a reduction in the number of international students coming to Australia.

As people defer non-essential spending, workers in the retail sector – clothing, footwear and accessories – are likely to be impacted and 151,600 employees are at risk.

“Workers in both at-risk groups are predominantly young. More than half are under 35 years of age. Six out of seven are employees. About one in every seven is an owner/manager or works in a family business.”

And Australia’s total workforce will inevitably shrink in the midterm, Prof Borland said.

“It is beginning to occur as schools and childcare centres close and workers withdraw in order to care for their children, and it is accentuated by parents not wanting to risk outsourcing the task to grandparents,” he said.

“In the coming weeks, there will be further hits to labour supply as illness from COVID-19 causes workers to need to take leave and other workers withdraw to provide care for family members who become ill.”