Confidence shattered by coronavirus

The latest Business Expectations survey has revealed an increasingly pessimistic outlook for the first half of 2020. Business confidence has collapsed in the face of the coronavirus pandemic which followed only weeks after a devastating bushfire season.

The Expectations index for the June quarter fell to 20.1 points, a decline of 21.6% from the previous quarter and down 1.8% compared with the same time last year. While the year-on-year decline was not particularly sharp, this was largely due to more positive sentiment during January 2020.

In contrast, this sense of optimism largely collapsed over February and March, particularly across the retail, wholesale and manufacturing sectors. Survey respondents are grim on employment prospects – retail, manufacturing and wholesale businesses are predicting massive staff cuts over the June quarter, with the entire consumer goods supply chain facing a dire year ahead as customers stay home in record numbers and the economy enters what could be a prolonged period of hibernation.

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