It’ll take months for consumers to emerge from their COVID-19 hibernation
Health & Biotech
Health & Biotech
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Governments around the world are beginning to open, or talk about re-opening, their economies, but even though the shutdown was rapid the stats indicate it will take months for people to feel confident in returning to their old habits.
Data from The Harris Poll, a US research firm, shows on average Americans believe they will be comfortable picking up the threads of their old lives between three and nine months after the spread of the virus has flattened.
These activities include going to the gym, the movies, out for dinner, or to a sports game.
It’ll take more than a year, if ever, to get 50 per cent of them back on a cruise ship, according to the April 11-13 survey.
“On average about 40 per cent of folks will restart many of their typical activities within three months and by the six month mark it’s up to about two-thirds on average,” says RBC Capital Markets’ chief US economist Tom Porcelli.
“Within a year, you are back toward 90 per cent. Interestingly, two things that move very little from low to high is taking a cruise and greeting people with a handshake. In other words, a handshake is viewed with nearly as much disdain as a cruise.”
However, with 22 million people out of work in the US a rise in spending is likely to lag the time when people feel comfortable doing so.
The infection rate is estimated at 0.5 per cent, about half the level that health officials needed to control the virus. The number of deaths has reached 63 and infections is 6,462.
But the bounce back, once that happens, may or may not be as quick as that outlined by hopeful American consumers.
Yesterday the National Cabinet agreed to a set of principles that would need to be met before restrictions were lifted and this wouldn’t be for at least “four weeks”.
The conditions included “situational awareness” of COVID-19 in the community; a finalised and adequately resourced surveillance plan; better understanding of modelling; mature public health capacity; mature health system capacity; advanced technology for contact tracing; and assurance of PPE supply lines.
Australia’s unemployment rate is forecast to hit 10 per cent and underemployment was already at 8.8 per cent in early March before the full impact of the crisis hit businesses, according to Australian Bureau of Statistics figures.
The early March figures show 14 per cent of Australians who are willing and able to work are either out of work or under-used.
Banks and analysts say there is a strong chance of the country falling into a recession.
There is no data yet on how long it will take for Australians to feel confident in returning to their old habits.
This week KPMG released findings on post-epidemic recoveries: it took Hong Kong six months to bounce back from the SARS outbreak in 2003 and South Korea a year to recover from the MERS epidemic in 2015.
The best case scenario is that Australia will start recovering economically next year, the worse case scenario is that it’ll take a decade to get back to normal.
In early April, KPMG suggested retail buying would bounce back online before people started physically returning to shopping centres. It did not put a timeframe on when that would be.
“We saw this enduring shift [to online buying] in consumer shopping behaviours as the economy recovered from the global financial crisis. During the crisis period many Australians experimented with online shopping for the first time as they looked for new ways to save money,” it said in a report on ecommerce.