Weirdly, CommSec’s latest State of the States report ranked Victoria in 3rd place and Queensland in 5th place, even though Queensland’s economy has definitely fared much better during the pandemic than Victoria’s. In my Thursday post I discussed how silly CommSec’s ranking methodology is and how it confuses the public debate, with one 612 ABC Brisbane guest inferring from CommSec’s report that Victoria’s harsh lockdown didn’t cost it in terms of economic growth. But of course the lockdown substantially reduced economic activity while it was in place and the Victorian economy still has not fully recovered from it. For another perspective on how badly Victoria’s economy was affected by the stage 4 restrictions resulting from the hotel quarantine fiasco, consider the ABS estimates of total hours worked per month for the major states and nationally. In December, total seasonally adjusted hours worked in Victoria were 4.5% below where they were in March, whereas they were nearly 1% higher in Queensland. And notice how hours worked in September in Victoria were 14% lower than in March.
I should note that conditions definitely aren’t back to normal yet in Queensland, of course, as the population has grown since March and jobs and hours worked need to be generated for new labour market entrants. So check out the chart below of hours worked per capita, a metric Pete Faulkner has noted has been essential in understanding the COVID recession (see Pete’s post on the day the December ABS Labour Force data were released earlier this month).
Even though per capita hours are marginally higher than they were in March, they had started falling earlier in 2020, largely due to the slowdown that was occurring irrespective of COVID, so a comparison with the March value may give us an overly optimistic impression. In his post, Pete Faulkner notes hours worked per capita in Queensland in December 2020 were 3.2% below what they were one year earlier. If we compare the December figure with the 2019 average, we see the December figure was 2.4% lower.
Queensland’s economy has coped with the COVID shock better than the rest of Australia’s, but we’re still below where we should be, and we know that the ending of JobKeeper at the end of March could have highly adverse impacts on regional economies such as Cairns. On this, check out my Saturday post and also Pete Faulkner’s latest post Regional QLD continues to lead the recovery in Domestic Tourism.
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