A tale of two cities

 Economies with and without Covid: NSW vs. WA


Covid-19 struck the Australian economy from March 2020, causing a historic economic downturn. Unemployment rose sharply, participation in the workforce reduced. 

Australian employment made a partial recovery after mid 2020, following a successful isolation from the Covid pandemic. This is reflected in the rebound up of participation, and down of unemployment.

 Since July this year however the Covid virus (Delta variant) has settled itself in both NSW and Victoria. Policy makers accepted that it was here to stay. Meanwhile, a fast vaccination effort was underway. This should see 80% of adults vaccinated by November 2021.

 The national unemployment rate continues on a downward path, reaching 4.5 percent at end August. But this number alone paints a misleading picture. Employment in NSW has dropped since July, due to Covid quarantining. Meanwhile, WA, which has had a booming export sector, and almost zero Covid, has rising employment, rising participation. QLD is in a similar situation. For this reason, WA leaders in particular are reluctant to open their economy to inbound travellers and returning residents over coming months. NSW on the other hand, will have little to lose by accepting a higher rate of Covid infection, while opening the largest economy of Australia. Over coming months therefore, unemployment should continue low, while employment (and participation) will rebound. 

Comments/questions welcome. 



Comments

Post a Comment

Popular posts from this blog

Australian Covid-19 vaccine rollout is accelerating and case numbers too

Image
  Everything is accelerating Australia’s vaccination for Covid-19 is accelerating and so are Covid cases in New South Wales, with Australia's largest state population.  Australia was slow to begin Covid vaccinations, by first world standards. Israel started in January of 2020. Now Australia is playing catch-up. This process has become urgent, as Australia's zero cases policy was punctured by a breakout of cases in NSW in July. Case numbers in mid-August in NSW have exceeded 400 a day, and still show no signs of slowing.  Daily average full vaccinations in Australia exceeded 0.4% of the population in mid August. In other words, every two days, almost one more percent of the total population is fully vaccinated against the virus. At this rate, the country will reach its target of exceeding 65% of the total population being vaccinated by mid November. This is roughly equivalent to 80% of the adult population, a key benchmark. At that point, lockdowns and most restriction should ea
Read more

Australian Covid vaccination crosses 300k jabs per day in August

Image
 Vaccination and Covid going gangbusters... A ustralia's Covid-19 vaccination effort is going gangbusters. More than 300k persons per day were being vaccinated in the final week of August. One-third of adults are double vacc'd. This achievement pushes forward the projection for economic opening.   Covid cases also started accelerating recently in New South Wales, the state with one-third of Australia's population. Covid new cases rose daily, alongside vaccinations, hitting 1000 in the last days of August. Lockdown has been the result, and only particular target vaccination levels will remove some of these restrictions. If 70% of the Australian adult population is vaccinated, then national flying will be more or less unrestricted, among other benefits. An 80% adult vaccination level would mean international borders open, with foreign students also being able to enter, with a consequent impact on economic activity and prices. 80% signals that a small number of deaths from Cov
Read more

Covid-19 vaccination hypothetical progress for Australia

Image
  If Australia was like ... Australia came late to Covid-19 vaccination, having successfully isolated since early 2020 from the severe contagion (and deaths) seen in many countries. Up to mid-year 2021, there have been less than 1,000 reported deaths. However, the isolation policy pursued by the Federal government will not be viable or optimal in coming months. The rest of the vaccinated world is opening up, while Australia continues to restrict the entry of foreigners, including tourists, students, and also returning Australians.  An accelerated vaccine drive is now under way, using the Pfizer and Astra Zeneca vaccines. Around 15 percent of the population is now fully vaccinated (1 August), but the level of full vaccination must reach at least 60 percent or higher, before many restrictions will be eased. So when will the country reach that level? The Prime Minister, Scott Morrison, has his own idea on this.  The chart above gives some indication of the possibilities. A comparison is m
Read more