As we approach the end of the financial year, it’s hard to believe what we’ve already endured in 2020. To re-cap, many suffered through drought, Australia was ravaged by fires, which is now followed by a health pandemic – something which will be remembered long into the future.
Compounding the pain, share markets have been obliterated, and Australia expected to officially head into recession over the coming months – something we have not experienced since 1991! The unemployment rate in Australia is expected to lift to 10% and potentially beyond. More than 1.5 million people have applied for JobSeeker payments and nearly 1.0 million individuals have requested access to funds in super.
Many media outlets will often report on the “doom and gloom”, however there is reason for optimism. April saw the Australian share market bounce by over 6%, with underlying sector and stock fundamentals taking over from pure panic. Financial markets around the world now seem to be stabilising as focus turns to re-opening various economies.
Petrol remains cheap, panic buying at grocery stores has slowed and social distancing measures look like they’ll soon be relaxed. Property prices remain stable for the moment; however, this is something we’ll continue to monitor.
As we make the transition over the coming months, many will find themselves either underemployed or completely without work. In turn, this will place added pressure on discretionary spending and will impact many working in hospitality and retail outlets.
Although recessions are painful, they essentially allow an economy to hit the “reset” button. During this time, businesses adapt by removing inefficiencies and look to implement new technologies. As business then become profitable again, they expand thus creating new opportunities.
If you or anyone you know has been made redundant, please do not hesitate to pass on our details. If this pandemic has taught us anything, it’s that we need to look out for each other and provide help to others in need.
Many thanks,
Synergy Private Wealth