Excel News – May 2020

Welcome to our May newsletter. After an extraordinary month of social and economic hibernation, there are positive signs that some of the restrictions on our everyday lives will soon be loosened somewhat. This is welcome news for households, businesses and our economy.

Data released in April provided an early insight into the impact of the coronavirus on the Australian economy. Inflation rose by an unexpected 0.3 per cent in the March quarter, lifting the annual rate from 1.8 per cent to 2.2 per cent. The biggest increases were food, alcohol and tobacco and health. The biggest falls were petrol, travel and accommodation.

Retail sales jumped a record 8.2 per cent in March as consumers stocked up on food and essentials ahead of the shutdown. New home sales fell 23.2 per cent in March while new vehicle sales were down 9.1 per cent in the year to March as Australians reassessed their finances. Of course, the retail numbers were well down in April as a result. National petrol prices fell to an average of 100.6c a litre in April, the lowest in 15 years – not as though we are able to take advantage of it while we’re all existing in isolation. Inconvenient, but it seems to be working in slowing the spread of the coronavirus.

Business confidence was at record lows in March, with the NAB index falling from -2.4 points to -65.6 points. Unemployment rose slightly to 5.2 per cent in March but Reserve Bank Governor, Philip Lowe said in a speech that he expects the rate to climb to 10 per cent in the June quarter and remain above 6 per cent for the next few years. He also expects inflation will fall significantly in the June quarter as our economy contracts. I’m not sure I agree this will be uniform, and expect there to be a mixed impact on prices as the supply chains for different products will all be impacted differently.

The last few weeks have been ridiculously busy for the team at Excel, with all efforts directed to helping our eligible business clients enrol and meet the conditions of the JobKeeper stimulus package – what a nightmare with a lot of rule changes and very short timeframes but we’ll get there in the end – and it’s great to see the first of the JobKeeper payments have started to flow.

Now we’re over this hurdle it’s time to focus on our normal work programme – they say there’s no rest for the wicked and it seems we’ve been very, very bad.

And finally, a big thank you for all the mums out there coping with all the changes to household routine. We hope you have a wonderful mothers day this Sunday.