COVID-19 Economic Outlook Tool
Version 2.0 (Model updated 9 Sept 2020. See revision notes below)
COVID19 will obviously have a substantial negative impact on economic activity in 2020. In response, .id has developed a COVID-19 Outlook Tool to show the economic and industry impacts at the LGA level. This tool draws on the economic forecast model developed by NIEIR and focuses on the impacts to September 2020.
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Headline estimates - CairnsImpacts refer to September quarter 2020 compared to September quarter 2019
Local job change
Employed resident change
- Gross Regional Product is forecast to fall by -7.5% in the September Quarter 2020. This fall was higher than the state average.
- Local Jobs are forecast to fall by -3.1% in the September Quarter 2020. This equates to a fall of 2,553 local jobs.
- If JobKeeper recipients impacts are included then the employment fall is estimated at -7.9% (6,568 jobs)
- The impact on employed residents (-1.5%) was lower than the local job impact.
Industry impacts data will be available soon.
Assumptions and methodology
NIEIR has estimated the potential impacts of coronavirus on economic activity, employment and sectors at the LGA level. Model outputs above are based on information available before September 9.
The forecast model estimates the impact on final demand on each industry and then calculates the multiplier effects using NIEIR’s regional database. Assumptions are made about the household, business and government supression rates directly flowing from the measures introduced to contain the virus. The impact of economic measures is also incorporated into the modelling. A contingency factor is also assumed to account for downside risks (e.g. productivity impacts from working at home).
Notes on LGA projections – September 2020
This note applies to the updated LGA projections issued in September 2020. The initial June quarter 2020 projection prepared in early April 2020 included a 12 per cent decline in national GDP. This has now been revised upward to -7.5%. The main reason for the difference was:
- earlier easing of restrictions over June than what was assumed; and
- a higher increase in household savings because of an assumed 50 per cent fall in other discretionary household expenditures.
That is, it was assumed that settings close to Stage Four restrictions would apply to the general retail sector even if not made mandatory because high infection levels will produce the same result. It would appear that Australia’s success in controlling initial infection rates saved between 3 and 5 per cent of GDP. This is consistent with international evidence. More information on the update can be found here.
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