09 Jun Local Economies During COVID-19: Month-by-Month Insights
COVID-19 has had a significant impact on our national economy. Physical distancing policies, travel restrictions and general uncertainty have all contributed to some of the most severe changes to economic activity that we have seen for many decades.
Official national accounts data, results from the Australian Business Economic Impact Survey (ABEIS), academic publications, and modelling from multi-national firms paint a picture of how the pandemic has changed Australia’s economic fortunes.
At a local level, there are important observations and questions. Why is retail in one region feeling the impact to a greater degree than retail in a neighbouring region? Why is the construction industry in an area contracting, but hardware store sales expanding?
Every regions’ economy is unique. Not only does every regions’ economy have its own unique composition of employment across industries, there are also unique combinations of occupations within industries, unique industry supply chains, and patterns of household consumption.
To assist with understanding the local impacts of COVID-19, REMPLAN have released a new resource for all our existing clients.
COVID-19 Impact Model: Month-by-Month Local Insights
For more than twenty years REMPLAN has been regionalising national-level economic data, delivering insights into the workings of local economies for governments and organisations across the country.
The COVID-19 crisis is no exception. Our team of economists, data scientists and analysts have been busy preparing the COVID-19 Impact Model to provide month-by-month, industry sector performance insights at the local level. This is now available on all REMPLAN public profiles.
This has not been an easy task. The rapid of changes that have taken place in addition to the divergence of once relatively linear economic relationships mean that estimating the scale and extent of job losses compared to revenue losses or value-added can be difficult (see our previous blog).
REMPLAN’s COVID-19 Impact Model provides key insights into the changes that are occurring across local economies, taking account of the unique structure and characteristics of individual economies.
The example below is for Ballarat, VIC:
The estimated impacts of COVID-19 in May 2020 are significant for most regions. Please note that as social lockdown restrictions are eased, we anticipate that the magnitude of the impacts will lessen. Watch this space to monitor the performance of your local economy over coming months.
If you require a forecast of the annualised impact of COVID-19 for your economy, please contact REMPLAN’s consultancy team.
How is the model developed?
The REMPLAN COVID-19 Impact Model has been developed using a combination of official economic and employment data releases, and insights from the nationally distributed Australian Business Economic Impact Survey (ABEIS).
The ABEIS continues throughout the pandemic, please encourage businesses in your regions to respond.
https://surveys.remplan.com.au/s3/REMPLAN-COVID-19-ABEIS
Methodology
Under the current COVID-19 environment there are non-standard and non-linear relationships between output, employment, wages and salaries and value-added. The Australian Business Economic Impact Survey (ABEIS) provides valuable insights into how businesses across industry sectors are being affected by the pandemic in terms of revenue, and also in terms of employment levels.
In some industries, the negative implications for employment are broadly proportionate to the changes in revenue. In other sectors however, most jobs are being retained despite reduced income. This is in part due to government assistance programs such as JobKeeper, however there are other variables such businesses aiming to trade through the crisis despite lower revenues and profits. Some businesses are also negotiating with their staff to accept, on temporary basis, lower wages and/or reduced hours.
The Australian Bureau of Statistics (ABS) Weekly Payroll Jobs and Wages data is providing further guidance into these unusual ratios between revenue : jobs : wages. Every region across Australia has its own unique economy and industry sector composition. Each industry in each region is also comprised of a unique composition of occupations. The U.S. Department of Labor’s O*NET data provides insights into the typical person-to-person proximity requirements across various occupations. This combined with Australian federal and state governments’ program of social lock down policies and their subsequent timeframes for easing these restrictions, are informing the forecast recovery trajectories for the respective industry sectors. On this basis, region-specific economic impacts of COVID-19 are estimated. This analysis is being updated on a monthly basis to monitor the economic recovery process.
How do I access the COVID-19 Impact Model?
You can explore the impacts of COVID-19 for local economies across Australia, via the public access REMPLAN Economy Profiles.
Coming soon: For REMPLAN clients without public profiles, the COVID-19 Impact Model will also be delivered via REMPLAN Economy software.
Please contact the team at REMPLAN if you have any questions. We are also available to provide REMPLAN software training, presentations and management briefings.
Call: 1300 737 443
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