Source: NAB (Alan Oster, Chief Economist)
While Bushfire impacts have been catastrophic for those directly involved we have used the Business Survey panel to try and judge the broader impact of the bushfires on the general economy. Although there’s no doubting the devastating impact upon local businesses in bushfire affected areas, key results suggest that the Bushfires have not impacted significantly on the macroeconomy (and significantly less than the Qld floods impact). Indeed the answers imply a reduction from Q1 2020 GDP growth of around 0.15 percentage points from Bushfires vis-à-vis more than 1 percentage point from the Qld floods. The Survey involves responses from 339 firms from our broader Business Survey panel and 279 firms from our SME panel. Broadly the results from both panels are similar.
Some of the key results are:
- Around 80% of respondents report no to little impact (by way of contrast Qld floods read was 68%) and moderate to large impacts were around 20% (Qld floods were 38%);
- Loss of capacity utilisation and revenue was relatively minor – but for some huge; average working days lost were around 4½ days but higher for SMEs and in NSW;
- Impacts were most pronounced for retail and transport and utilities followed by wholesale and recreational and personal services; the largest impacts were in NSW and Victoria;
- There was a large section of losses not covered by insurance (higher in the SME space);
- The biggest restraints to recovery were labour and material availability, lack of demand and utility outages;
- A surprisingly large number of respondents reported that they were back to pre-bushfire business levels (around 75%). Those reporting it would take more than a month to recover were around 8% (Qld floods were over 20%).
- While around half of respondents saw no need to put more emphasis on climate change from the bushfires (especially mining & construction), there were 30% suggesting moderate to significant change was required.
Finally while the indirect impact from the bushfires on the broader economy was surprisingly low (in our opinion) they are consistent with only small differences between the December and January Monthly Business survey results.