Some Regional Areas ‘May Be Less Buffeted By Economic Headwinds’
While tourism centres like Cairns and The Whitsundays will bear the brunt of COVID-19 headwinds, it’s possible that other regional areas may cope slightly better, according to a Central Queensland University Professor.
However, CQUniversity economist Professor John Rolfe added, the latest RBA rate cut will have limited benefits for regional areas.
Professor Rolfe said the real focus of the RBA rate cuts is to provide some positive impacts into the finance, investment and property sectors, which tend to be concentrated in urban centres.
“However, all sectors and regions in Australia will benefit from ensuring that the business, financial and economic systems can weather the current shocks.”
Professor Rolfe says the coming slowdown will affect all areas of Australia though combinations of demand reductions, restrictions on economic activities and impacts on supply chains.
He says the reasons that some regional areas may fare slightly better include:
- Relatively smaller tourism sector
- Limited exposure to mass travel industry
- Small services / professional sector
- Limited direct job losses in major sectors (e.g. airlines, travel, accommodation)
- Less reliance on major public events
- Perhaps a smaller risk of infections
“There also may be limited impacts on primary sectors like agriculture and mining, particularly if China rebounds quickly,” Professor Rolfe says.
“One of the key determinants going forward will be the extent of differentiation in controls imposed to reduce transmission rates. If tighter restrictions are only imposed on the areas where most Covid 19 cases are (e.g. urban areas), then regional economies will be less impacted. But if restrictions are unilateral across the country, then regional areas will suffer very similar impacts to their urban counterparts.”