Australia & New Zealand combined are projected to see minimal GDP growth in the remainder of 2020:
Australia’s economic relationship with China has seriously cooled down in the last couple of months, this issue is related to China’s South China Sea territorial claims that Australia is criticizing. This dispute will impact Australian mineral exports and could impact future mining related projects.
Australia has performed reasonably well in dealing with the pandemic. New Zealand’s mitigation efforts are considered to be the best out of all major and mid-sized countries. The full economic impact and fallout of the COVID-19 on Australia’s & New Zealand’s construction sectors still needs to be fully recognized, it will most probably take another couple of months for the dust to settle before a clearer picture emerges.
The truth is that many CAPEX construction projects will be delayed, mothballed or worst case situation cancelled, this situation in the short term could drive up construction unemployment rates in both countries. We do expect a gradual & steady economic upturn as we transition into 2021 and the number of COVID-19 confirmed cases starts to decline & travel restrictions are lifted.
COVID-19 has hindered CAPEX spending and delayed current construction projects in both countries. Australia and New Zealand in their two centuries of existence have never experienced an economic tsunami / earthquake of this scale. The Government of New Zealand is preparing to invest considerable funds on infrastructure / public works projects to minimize current and future unemployment.