City of Monash

COVID-19 Economic Outlook Tool

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Version 1.1 (Model updated 7 May 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 June 2020. We will continue to update our forecasts as more information is known about the health measures and the effectiveness of economic policy.

This page is subject to the disclaimer and copyright notices as set out below.

Headline estimates - City of MonashImpacts refer to June Quarter 2020 compared to 2018/19 4-quarter average

GRP change

-10.3%

Local job change

-7.6%

Employed resident change

-9.2%

Sector impacts - Top 3 (excluding JobKeeper)

  • Professional, Scientific and Technical Services (-1,980 local jobs)
  • Education and Training (-1,944 local jobs)
  • Retail Trade (-1,710 local jobs)

Key Insights

  • Gross Regional Product is forecast to fall by -10.3% in the June Quarter 2020. This fall was lower than the state average.
  • Local Jobs are forecast to fall by -7.6% in the June Quarter 2020. This equates to a fall of 11,089 local jobs.
  • If JobKeeper recipients impacts are included then the employment fall is estimated at -10.6% (15,456 jobs)
  • The impact on employed residents (-9.2%) was higher than the local job impact.
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Industry Impacts

The impact of COVID-19 will vary from region to region and will depend on the regions supply chain and trade exposure (domestic and international), reliance on tourism and exposure to consumer demand (e.g. accommodation, food services, arts and recreation).

Economic Impact

The chart below presents the output and value added impacts of COVID-19 in the June Quarter 2020. Output refers to the total sales of each industry in the region. Value Added refers to the wages and salaries paid to workers in the region, the gross operating surplus and taxes. Value added impacts show how the different industries impact GRP in the region.

  • Output
  • Value Added
  • Number
  • Percentage
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Local Jobs Impact

This indicator shows the estimated number of jobs in the City of Monash. Local job impacts are typically higher in regions with a relatively high share of service sector and labour-intensive jobs (e.g. tourism and hospitality, entertainment, and business services).

  • Number
  • Percentage
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Employed Resident Impacts

Another way of looking at the impacts is to analyse the industry impact on local residents, that is employed residents who live in the region but may work elsewhere. This is important in understanding the impacts on council rates and local unemployment.

  • Number
  • Percentage
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Data updates

This page is the latest version of up-to-date economic data showing the local impact of COVID-19. However, as new information becomes available, e.g. changes to government stimulus, shifts in quarantine conditions, or the release of relevant date etc. revisions and updates will be applied, and new data will be added where possible.

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 May 7.

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).

The modelling assumes that rigid social distancing measures are maintained well into June. A gradual unwinding of social distancing measures are assumed but a more complete recovery only becomes possible when a vaccine becomes generally available by the March or June quarter 2021.

These forecasts are subject to a high degree of uncertainty and will continue to be improved and updated as more information is released.

For more details, see Methodological Paper: Modelling the impact of COVID-19 at the Australian Local Government Area (LGA) level

Revisions

Version 1.1 Revisions - model updated on 7 May 2020

For the June Quarter 2020, NIEIR’s Australia GDP estimate has been revised from -16.6% to -12.4%. Compared to NIEIR’s previous forecast (based on information available mid-April 2020), the better than expected containment of the virus has impacted assumptions related to household spending and social distancing impacts. This has resulted in lower impacts across a numbe of sectors. For example, impacts on Education have not been as high (e.g. restrictions on schools not as severe as first thought).

Disclaimer

This report has been prepared for the City of Monash. .id has taken all due care in the preparation of this report. Content in this Report is based on Data from the National Institute of Economic and Industry Research (NIEIR) and the Data remains the property of the NIEIR. While NIEIR endeavours to provide reliable forecasts and believes the material is accurate it will not be liable for any claim by any party acting on such information. .id accepts no liability with respect to the correctness, accuracy, currency, completeness, relevance or otherwise of this Data. Please view our Privacy Policy, Terms of use and Legal notices.

Copyright Notice

This Report and all material contained within it is subject to Australian copyright law. Copyright in all such material [excluding ABS Data & other data or information where ownership by a third party is evident] is owned by .ID Consulting Pty Ltd ACN 084 054 473. Other than in accordance with the Copyright Act 1968 or as specifically agreed between .id and the Client, no material from this Report may, in any form or by any means, be reproduced, stored in a retrieval system or transmitted, without prior written permission from .id. Any enquiries regarding the use of this Report should be directed to info@id.com.au or 03 9417 2205.

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