COVID-19 and What it Means to the Australian Workforce

2020, Job Market

The recent rise of the previously unknown COVID-19 has significantly damaged the operation of various industries. At the time of writing, here in Australia, we have 6,416 confirmed cases and 61 deaths. Despite strict lockdown rules, infections are rising at a rate of approximately 50 per day. 

Many industry sectors are being affected, some adversely, some positively. 

Mining

  • The impact of COVID-19 on the Australian mining sector is expected to be significant and direct. The curtailment of global manufacturing activity has led to a slump in commodity prices, particularly for crude oil, copper, iron ore, and other industrial commodities.
  • COVID-19 could disrupt the demand for steel through hindering manufacturing activity, which could significantly reduce the demand for iron ore and black coal, presenting a significant threat to Australian miners.
  • Several major Chinese commodity buyers could invoke force majeure clauses in their supply contracts with Australian miners. These clauses absolve the buyer from a legal commitment to purchase goods amid unforeseeable circumstances.
  • This is particularly threatening for Australian natural gas exporters, which may struggle to find alternative buyers amid an oversupply in the global market. Natural gas is trading at its lowest price since March 2016.
  • Precious metals producers are likely to benefit from COVID-19 fears, as risk-averse investors transition into safe-haven assets such as gold, silver, and palladium. Australian miners are likely to directly benefit from rising gold prices, which in February 2020 reached the highest level since March 2013 at over $1,600 USD per ounce. However, in March 2020, there was a significant selloff by profit-taking investors that decreased the price of gold to a low of approximately $1,470 USD per ounce. Gold prices have since recovered as investors look to safe-haven assets.
  • The Federal Government introduced restrictions on all non-essential services on March 23rd. Although these restrictions do not include mining activity, it is expected to disrupt downstream demand for commodities.
What doess COVID-19 Means to the Australian Mining & Construction Workforce

Construction 

  • Shutdowns of non-essential activity do not apply to construction sites. Consequently, these projects are anticipated to continue operations.
  • China has invested strongly in building hospitals in response to the outbreak. Any effort by the Australian Government to construct medical facilities would boost revenue for the Institutional Building Construction industry.
  • Rising steel prices due to declining Chinese production may inhibit construction activity.
  • Declining construction activity in China is negatively affecting demand for minerals. Heavy Industry and Other Non-Building Construction depends heavily on mineral developments, meaning weakening mineral prices can dampen demand.
  • Construction relies heavily on labourers who are not able to work from home. Consequently, any reduction in the labour supply due to quarantine requirements among labourers has the potential to delay projects.

Healthcare

  • The Australian Federal Government is establishing 100 respiratory clinics to assess people with fever, cough, a sore throat, or shortness of breath.
  • On 11 March 2020, the Federal Government announced a $2.4 billion health package, which is expected to support primary care, aged care, hospitals, research and medical stockpiles.
  • On 29 March 2020, the Federal Government announced an additional $1.1 billion health package aimed at boosting mental health services, domestic violence support services and Medicare assistance for both emergency food relief and people at home.
  • On 6 April 2020, the Early Childhood Education and Care Relief Package was implemented. This package is aimed at providing additional support to families and the Child Care Services industry. Weekly payments will be made directly to early childhood education and care services instead of the Child Care Subsidy up until the end of the 2019-20 financial year. This is expected to help retain employees and keep early childhood operators open during this period. In addition, families will not be charged fees during this period for early childhood education services.
What doess COVID-19 Means to the Australian Healthcare Sector Workforce

Help is At Hand

Australia is determined to help all industries through this difficult time. As part of ‘Team Australia’, Austrade is working closely with the network of government departments and industry agencies to help Australian businesses overcome complex and fast-evolving COVID-19–related challenges. Click on this link to access updates on markets and logistics, and links through to the Government’s extensive business support programs.

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