Moving into the second quarter of 2022, we are pleased to convey a message of reassurance and confidence in upcoming business conditions and sentiments to our clients.
According to KPMG’s economic outlook for Q1 2022, the re-opening of Australia’s economy has revealed an exceptional degree of resilience in the midst of a surge in the Omicron variant and in times of geopolitical unrest. A general economic overview for Q1 2022 are as follows:
- With vaccination rate targets achieved across states and lockdowns easing, GDP rebounded by 3.4 percent in Q4 2021.
- Household consumption has led the recovery, housing construction and business investment now recovering from Delta wave.
- The Omicron wave dampened the start of 2022, but better than expected health outcomes have allowed the economy to re-open.
- The current geopolitical situation has placed upwards pressure on commodity prices, however the government has pledged to halve the fuel excise on petrol and diesel mitigating the effects of commodity price inflation.
- Supply chain and logistics disruptions have eased, but could re-emerge.
- The labour market remains buoyant.
- First cash rate rise expected in August 2022.
According to the Australian Bureau of Statistics there is more positive news for Australian businesses.
- Average Australian turnover in 2022 has risen by 1.8% in February alone which followed a 1.6% rise in January.
- An increase in discretionary spending through easing of restrictions has been most impactful towards cafes, restaurants and takeaways which have experienced an astronomical rise up 9.7% in February.
- The retail, accommodation and motel industry in particular has also seen a rise in demand as borders reopen and tourism picks up.
Both the Federal Budget released on Tuesday 29 March 2022 and KPMG’s economic overview of the previous quarter provide a positive outlook for small businesses in Australia to transition out of the pandemic. We remain committed to our goal of helping you achieve your business objectives, so please do not hesitate to contact our brokers for assistance.
