In mid-February around 1-in-6 Australian businesses (15%) have already been affected by the coronavirus, also known as COVID-19. This new threat to business comes after over a quarter of Australian businesses (28%) said they have been affected by the extensive bushfires over the last few months according to a special Roy Morgan Snap SMS Survey of 1,170 Australian businesses.
Coronavirus hits Education, Manufacturing and Wholesale industries hard
A little over a week after the Australian Government stopped all direct commercial flights to China in early February the coronavirus (COVID-19) is already striking several industries.
Around two-fifths of Manufacturers are already reporting being affected and closely followed by a third of Education & training businesses and those in the Wholesale industry.
Other industries to already be feeling the effects of the coronavirus include Accommodation & Food services which includes travel and tourism businesses, Community services, Administrative & Support services and Property & Business services.
Respondents to the survey described in their own words the impact the coronavirus was already having and these responses fell into a few broad categories including the issue of workers, or students, being quarantined and kept away from work/study; the impact on supply lines for the import or export of goods and parts to and from China; the decline in forward bookings from Chinese tourists and cancellations by customers in Asia as well as the general hit to confidence which includes a weaker stock-market as well as lower foot traffic in stores due to a combination of the aforementioned.
Bushfires/Floods strike Tourism, Retail and Property & Business services industries
A deeper analysis of the industries most heavily impacted by the bushfires/floods shows that over 40% of businesses in the Accommodation and Food services sector, which includes travel and tourism, say they have been affected either ‘A great deal’ or ‘Somewhat’.
Around a third of businesses in the Retail and Property & Business services industries have been affected while there have also been disproportionately large impacts on Manufacturing, Transport, Postal and Warehousing, Public administration & defence, Education & training and Recreation & personal.
Businesses in the East Coast States of Victoria (39%), NSW (31%) and Queensland (23%) have been the most heavily affected by the bushfires/floods. In contrast only 14% of businesses in Tasmania and 11% of businesses in both South Australia and Western Australia have been affected at all.
Further details on how the recent bushfires affected Australian businesses can be found here.
Roy Morgan Chief Executive Officer Michele Levine says the long bushfire season has finally ended with drought-breaking rains in recent weeks however the new threat of coronavirus is a growing threat to the recovery of the Australian economy:
“The new threat of coronavirus (COVID-19) that has emerged in recent weeks is already hitting the business community in much of Australia – and in several states including Western Australia, South Australia and Tasmania – has already had a bigger impact than the bushfires..
“The Australian Government halted all flights from China in early February and that ban is still in place on a week-to-week basis as the spread of COVID-19 in China is being monitored.
“Already feeling the effects are Manufacturing businesses which rely on China for the importation of many parts, Education & training – China is the largest source of foreign students in this $35+ billion industry and Wholesale which imports many goods manufactured in China for sale at Australian retail outlets.
“The Tourism industry is also in the firing line as Chinese tourists (the largest inbound tourism market) are barred from visiting Australia until further notice. In addition, the all-round impact of the coronavirus is having an increasing impact on general confidence which in turn has a negative effect on retail foot traffic. We’ve already seen restaurants close due to the decline in customers particularly in places heavily reliant on Chinese-owned businesses such as Chinatown.
“It is hard to predict exactly how the full impact of the coronavirus will be felt in the Australian economy over the next few months although it’s safe to say that the negative economic ‘shock’ is set to grow after outbreaks of the virus have been seen in such diverse places as South Korea, Iran and Italy over the last few days.”
Businesses affected by the bushfires/floods cf. coronavirus around Australia by State
Source: Roy Morgan Special
Snap SMS Poll of Australian businesses in February 2020, n=1,170.
Base:
Australian businesses.