The destruction brought on by the COVID-19 continues to many parts of Australia as lockdowns are starting to be implemented again, affecting many retailers and businesses. It was even reported recently that Sydney’s latest lockdown could cost retailers upwards of $2 billion, making it another huge blow to the economy of Sydney. At the rate at which the vaccination efforts and the number of infections go, this may not be the last of these debilitating lockdowns.
The Impact of Further Lockdowns on the Economy
Lockdowns threaten to further shrink Australia’s economy as its most populous city is forced to go on lockdown, with a slow vaccine rollout adding to the headwinds. There’s already been a reported drop in Australia’s GDP from the previous quarter, and any further lockdowns would only aggravate the situation and cripple the country’s economy. This actually represents Australia’s first economic contraction since June 2020, when the nationwide coronavirus lockdown started.
Many economists and business leaders have begun to worry since the country was just starting to bounce back after last year’s contraction. The country’s $2 trillion economy is already larger now than its pre-pandemic level of $1.5 trillion. But all that progress is threatened again by the recent lockdowns. The recovery has actually come under a cloud, with more than 5 million Australians in Sydney alone forced to stay at home since late June. This is in the wake of the growing number of cases infected with the highly contagious Delta strain of the coronavirus.
How are Businesses Affected by Lockdowns?
Many news and media outlets have reported that these recent lockdowns could actually be the tipping point for small businesses to consider insolvency. The owner-operator of small businesses in Sydney’s CBD is the most at risk due to the near-zero traffic it’s experiencing today and the fact that they have no other establishments to fall back on.
Last year’s lockdowns already crippled these small retailers, and they haven’t even fully recovered from it just yet. With the absence of the JobKeeper program this time, there’s no telling what would happen to these retailers. Some of them have even started negotiating rent reductions with landlords as they no longer have the means to pay for rent since there’s no business happening in the area.
As CBD workers are urged to work at home, the once-thriving city retail spots stand to lose millions of dollars in revenue every single day. It’s not actually hard to see the impact of this. All one has to do is walk through the city streets to see more ‘for lease’ signs being put up.
How Long is the Lockdown Going to Last?
The lockdown was first implemented in late June with a two-week duration, according to the initial announcement of the Australian government. However, the lockdown has since been extended with a current end date of July 30. In reality, it is not actually clear how long the lockdowns will last, as government officials are still quiet about any possible extensions.
Conclusion
Australia has been relatively successful in containing the coronavirus clusters in the country. However, the new threat brought on by the Delta variant and the slow rollout of vaccines forced Sydney to implement a city-wide lockdown. While this recent lockdown is slowly chipping away what progress has been made in the city’s economy, Sydney residents are hoping to have the lockdowns lifted so they can resume some sense of normality again.
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