Employment in the arts and hospitality industries that have been hit hardest by the coronavirus crisis will take more than five years to recover to pre-pandemic levels, Deloitte Access Economics says.
In a report released on Wednesday, economists painted a grim picture of the job losses wrought by the coronavirus shutdown across the Australian economy.
Deloitte estimates some white-collar sectors have suffered job losses of less than 10% and will rebound to previous employment levels before the end of next year.
However, it estimates that between 50% and 60% of jobs have been lost in the accommodation, food, arts and recreation industries, and these will not recover before the end of 2025.
Retail, where spending plunged by a record 18% in April, according to preliminary statistics, also faces a long recovery – Deloitte estimates 10% of jobs in the sector are gone and it will take until August 2025 to recover.
Deloitte predicts that the finance sector, which has been heavily supported by the Reserve Bank and has so far lost few jobs, faces a delayed wave of job losses as the effects of the crisis sweep through the economy.
More than 10% of workers in the sector will lose their jobs and employment will not recover until late 2025, Deloitte predicts.
The Deloitte Access Economics partner David Rumbens said the recovery of arts and hospitality businesses, which were the first to be closed by government restrictions, would be slowed because the sectors faced a second wave of economic pain.
“There’s the broader loss to the economy and consumer spending, which often drives these services, and that’s going to be constrained for a while,” he said.
“Unemployment’s going to be quite high, or higher than it was, for a period of time.”
Preliminary retail sales figures released by the Australian Bureau of Statistics on Wednesday show that spending on areas traditionally regarded as discretionary – clothing, footwear, accessories, eating out and takeaway food – fell to half its normal levels in April.
An end to stockpiling also saw food retail sales tumble 17%.
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Online retail sales were also “strong”, with about 10% of purchases made on the web, the ABS said.
In a report to clients released on Tuesday, analysts at the investment bank UBS said the proportion of purchases made online, excluding food, would soar from 11% today to 17% by 2024, quickening the decline of bricks-and-mortar retail outlets.
One in five speciality retail stores could be closed by 2024, the analysts said.
Rumbens said the economy could be shaped quite differently after the crisis.
“We’re certainly seeing some changes to consumer behaviour,” he said.
He said that about two-thirds of consumers surveyed by Deloitte made an online purchase in the previous week.
“That kind of shift is under way,” he said.
He said the delayed hit to the finance sector was likely to have a big effect on employment in Australia’s central business districts.
“Finance hasn’t necessarily been hit yet but a lot of the impact has been deferred, because loan payments have been deferred,” he said.
“It’s a shallower dip now, but it’s a longer recovery.”
