KPMG has warned that the Australian economy will not recover its losses from the coronavirus pandemic until the September 2021 quarter. The firm’s research suggests that industries such as healthcare, public administration and civil engineering will have fully rebounded by the end of 2020, but the hospitality, accommodation, and retailing and sectors will not recover until March 2022. KPMG’s forecasts are based on expectations that the easing of lockdown restrictions will not result in any major virus outbreaks:
The KPMG research shows economic activity in the accommodation and food services sector will be half what it was by June 2020 before charting a long and painful return to pre-COVID levels of output by March 2022, almost two years later.
The same trend is true for the retail trade. The air transport industry will suffer a similar, rapid collapse, but won’t surpass its December 2019 output levels until June 2022 as international borders stay closed well into 2021. Arts and recreation businesses will suffer a 40 per cent hit to output, and will also stay at relatively depressed levels until the first quarter of 2022.
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Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
