Industries hit hardest by COVID-19: Where does your business sit?

Emilio Mattiuzzo

Tuesday, 20 October 2020

Most Aussie businesses have been affected by COVID-19 in one way or another, but recent RBA data shows us exactly how hard some industries have been hit. Restrictions and lockdowns are the biggest culprits, but changing consumer behaviours will also play a role in the future of each affected industry, and our economy overall.

8 industries in Australia severely impacted by COVID-19

1. Retail

While the retail market was expected to grow by 2.7% in 2020, it actually dropped off by 3.2%, costing the market a total of $17 billion. While retail stores were never technically forced to shut, many employers made the call on their own to protect staff and customers. Lockdowns and restrictions have also kept consumers away from shopping centres and physical stores, with many choosing to buy online instead or simply live with less.

2. Live music and events

Due to restrictions around social gatherings, the arts industry has taken a real hit. Concerts, festivals and live music are a thing of the past (at least for now). According to peak body Live Performance Australia, 65,000 events were cancelled due to restrictions, leaving hundreds of thousands of jobs unsteady. Major festivals and events have also been cancelled, including the Royal Easter Show, Vivid, Splendour in the Grass and Sydney Film Festival to name just a few.

3. Education

With visa granting on hold in line with restrictions, universities in Australia have been impacted massively. While the severity of the impact will differ among each university, it is estimated that Australia-wide, revenue will drop by $3 billion. According to the head of Universities Australia, Catriona Jackson, universities will feel the impact of COVID-19 for years. Up to 21,000 jobs are at stake and 7,000 of them are estimated to be academic research-related roles.

4. Gyms and health clubs

Restrictions saw gyms and health clubs closed for months, forcing them to put memberships on hold. Although public gyms are relatively safe now with new hygiene practices in place to protect members, germs can still live on surfaces such as metal bars and weights, and many previous gym-goers have been converted to at-home workout routines. This, along with less disposable income, has led to memberships cancelled for good. In fact, 24% of businesses within the fitness industry have reported a 61% decrease in memberships due to COVID-19.

5. Hospitality

After the temporary closure of cafes, bars and restaurants, venue owners had to think on their feet to survive. Coffee shops started delivering to doorsteps and sit-down restaurants began serving takeaway to get through the worst of COVID-19. Even now, although many venues have reopened, there are new rules around capacity, bookings and checking in that could be seen as a deterrent by consumers.

6. Wedding and laundry services

Planning a wedding is stressful enough. With so much that could go wrong—timeline issues, bad weather, wardrobe malfunctions and of course, unprecedented pandemics—things can quickly get awry. Unsurprisingly, the wedding industry reported a slew of cancellations and postponements, with many vendors unsure of how or when things will pick up.

With hundreds of events cancelled and employees largely working from home, laundry services also took a huge hit, with 53.5% of jobs in the industry lost between the months of February and April.

7. Airlines and tourism

One of the first industries to feel the pinch from restrictions were airlines. Due to state and border closures, they've seen a huge drop in revenue, having to let thousands of their staff members go, and force others to take leave (paid or otherwise). Tourism is also one among the hardest hit industries due to continued travel restrictions.

8. Healthcare

The healthcare industry has no doubt faced the biggest challenges of all. From establishing pandemic response teams and protocols to carrying out over 80,000 tests and fast tracking capacity for beds, diagnostics and equipment, the healthcare system has been shaken up like never before. And even post-pandemic, it will likely take time to get back to ‘business as usual’.

Where does your business sit?

As seen in the graph below, industries that have been hit hardest according to RBA data are accommodation, food, arts/media, education, admin and healthcare.

[Image] - COVID-19 Graph (Changes in Revenue)

Roughly 3.5 million Aussie workers (28% of all workers) have been affected. Further, employees who have been impacted most severely tend to be women, younger people and those with low educational attainment.

Unemployment hit 6.9% in 2020, and while no one can predict exactly how things will pan out post-pandemic, the Government is doing their part in assisting Aussie businesses through tax refunds, grants and the JobMaker scheme, among other initiatives. Find out more about the latest initiatives announced as part of the 2020-21 budget.

Emilio is a Business Analyst here at Valiant. He draws on his passion, insight and understanding of small business to help our talented team of lending experts better understand their customers' needs.

Related Posts

What the 2021-22 federal budget means for Aussie SMEs

The recent budget revealed a range of support measures for Aussie SMEs. Find out which ones apply to you.

Valiant officially partners with Australia Post!

Valiant has partnered with Australia Post to offer business customers a streamlined solution to accessing the right business finance. Click to learn more.

Industries hit hardest by COVID-19: Where does your business sit?

Which industries were hit hardest by Covid? Find out where your business sits according to the RBA.