Australia / Spotlight Reports
Economic Update: COVID-19 and International Trade, April 2020

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by Liam Harrison
Apr 08 2020

COVID-19 has continued to affect Australian businesses. The latest international trade figures indicate total imports and exports of goods and services fell in the month of February. Exports of goods and services fell 4.7% over the month. Services took a particularly heavy toll in the month, dropping 9.7%. This was largely due to a significant reduction in travel as COVID-19 restrictions began to take place during the month. Exports to China also fell sharply, with a 9.9% drop compared to January as business activity slowed in China due to COVID-19 restrictions.

Imports of goods and services also fell in the month of February, with a 4.3% drop over the month. The total value of imports from China fell 41.2%, the largest monthly fall on record. The threat of COVID-19 severely restricted China’s manufacturing capabilities over the month of February, placing downward pressure on output and restricting its ability to export goods. Overall imports of clothing and footwear imports felt a significant impact, dropping 20.2%. China is the largest import source of these goods, and is the key driver behind the significant drop. International trade volumes are anticipated to drop further in the coming months, as COVID-19 affects countries across the world.

The Australian Bureau of Statistics has also begun to measure the ongoing impacts of COVID-19, with 66% of businesses reporting a reduction in turnover due to COVID-19 in March. Approximately 90% of businesses across Australia are still operating across all sectors. However, the Accommodation and Food Services sector and Arts and Recreation Services sector have substantial inactivity, with only 69% of businesses and 47% of businesses operating respectively.

Almost half of all businesses reported changing workforce arrangements in response to COVID-19. 41% of businesses with an employee size of 20-199 reported reducing hours for staff in response to the crisis. The Accommodation and Food Services sector has been the hardest hit, with 70% of businesses reporting reduced hours for staff and 43% placing staff on unpaid leave. The Professional, Scientific and Technical Services sector has been one of the least affected industries, with only 20% of businesses reporting reduced hours and 25% reporting change of location (such as working from home arrangements).