Capital lockdowns to deliver $2.5b hit as business takes another blow

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Association chief executive officer Paul Zahra said it was time for nationally consistent lockdown rules.

“Currently, confusion reigns whenever restrictions are announced. This adds time and further cost for retailers and food operators on top of the heavy impact they already wear on lost retail trade. A year and a half into the pandemic, there’s no excuse for this confusion,” he said.

Australian Retailers Association CEO Paul Zahra says nationally consistent lockdown rules are now required.

Australian Retailers Association CEO Paul Zahra says nationally consistent lockdown rules are now required.Credit:Alex Ellinghausen

AMP Capital chief economist Shane Oliver said the cumulative cost of the current lockdowns would be at least $2.5 billion.

He said once the lockdowns were over, the economy would rebound.

“While we estimate a hit to economic activity from the Sydney lockdown alone of about $2 billion if it’s contained to two weeks, much of that will likely be recouped upon reopening,” he said.

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“Of course, the risk is greater now that we are dealing with the more virulent Delta variant, but so too was Victoria in late May.”

Research from ANZ economists suggests there will be a sharp recovery once the lockdowns conclude.

They found Melbourne spending has more than bounced back from its May 28 to June 10 lockdown.

Economists Adelaide Timbrell and Felicity Emmett said they estimated the Sydney lockdown would trigger a fall of between 30 and 40 per cent in spending, but it was unlikely to have a long-term impact.

“Melbourne residents seem to have made up for lost time at the shops, with very strong non-food retail spending in Melbourne in the two weeks after lockdown,” they said.

“This signals that physical movement restrictions – and not economic caution – were behind the fall in spending during lockdowns.”

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