Australia

Australia's hospitality, arts industries may not recover from coronavirus until 2026, economists say

Cafe customers sit at tables distanced from each other in Southbank in Brisbane, Sunday, 17 May, 2020. Source: AAP

Sectors hardest hit by the coronavirus might not fully recover for five or six years, economists have predicted.

Hospitality and the arts, industries that were hit the hardest by the coronavirus pandemic might not fully recover for five or six years according to Deloitte Access Economics' latest employment forecast.

Shutdowns and restrictions that were implemented earlier this year amid the outbreak of COVID-19 has heavily impacted the hospitality and art sectors.

Australian Bureau of Statistics data shows that more than a quarter of hospitality jobs have been lost since mid-March and about one in five arts sector positions.

Deloitte partner David Rumbens said that while it might take until 2026 for these sectors to bounce back, media, telecommunications, education and property services are predicted to go back to 'normal' by the end of 2021.

Deloitte Access Economics' latest employment forecast, released on Wednesday, sets out just how long the recovery from the crisis could be.
A new employment forecast states it could be 2026 before the arts and hospitality sectors go back to 'pre-coronavirus' normality.
AAP

Shadow treasurer, Jim Chalmers said the analysis highlighted how Australia's recovery would largely depend on how the government stimulus was targeted.

"These sobering assessments should pour cold water on the prime minister's belief that the Australian economy will miraculously 'snap back' by the last Monday in September this year," he said. 

The report also highlights data showing the total hours spent in workplaces is less than half of what would be expected without the coronavirus restrictions.

The emptying out of the nation's CBDs has a flow-on effect for other businesses like cafes and shops.

Meanwhile retail trading dropped by more than 17 per cent in April, preliminary figures released by the ABS on Wednesday show.

After unprecedented rises in grocery spending led an 8 per cent rise in retail trade in March, the falls in April were seen across the board and retail turnover is below February's level.

However, while panic buying in supermarkets eased, spending on groceries was still higher than a year ago.

BIS Oxford Economics chief economist Sarah Hunter said that the huge change in employees working from home has had an economic benefit to grocery stores.

"(This is) confirmation that the shift to working from home for almost half the population has resulted in a significant increase in spending in the supermarkets," she said.

Although elsewhere, stores selling clothing and shoes, and cafes and restaurants, have all reported half their turnover of April 2019.

Dr Hunter is hopeful anticipating that spending will rebound in May when restrictions are lifted further.

Australia's hospitality and arts sectors might not return to their pre-coronavirus state until 2026, economists have predicted.
Australia's hospitality and arts sectors might not return to their pre-coronavirus state until 2026, economists have predicted.
AAP

Mr Rumbens expects the majority of workers will return to their usual work locations by the end of the year.

But he notes the coronavirus emergency has given employers and employees the chance to see how working remotely can be done.

"At least during the period that we continue to live with COVID - prior to a vaccine for example - it is likely that the tendency to work from home will remain above pre-crisis levels," he said.

The decades-long trend towards small offices with people packed in more tightly will probably be abandoned but offices won't be ditched completely.

"Both employers and employees recognise the advantages of in-person collaboration and the wellbeing benefits of social interaction with colleagues more generally, especially after months of social distancing and isolation," Mr Rumbens added. 

People in Australia must stay at least 1.5 metres away from others. Check your state’s restrictions on gathering limits.

Testing for coronavirus is now widely available across Australia. If you are experiencing cold or flu symptoms, arrange a test by calling your doctor or contact the Coronavirus Health Information Hotline on 1800 020 080.

The federal government's coronavirus tracing app COVIDSafe is available for download from your phone's app store.

SBS is committed to informing Australia’s diverse communities about the latest COVID-19 developments. News and information is available in 63 languages at sbs.com.au/coronavirus.

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