Hunter economy reeling from impact of COVID-19
Regional labour force statistics for May released today paint a devastating picture of the impact of COVID-19 in the Hunter region, with about 36,000 jobs estimated to have been lost in May and youth unemployment in the Newcastle and Lake Macquarie area having skyrocketed to 26.8 per cent.
Hunter Business Chamber CEO Bob Hawes said Business NSW estimates, calculated using average employment in the 12 months to February 2020 as a benchmark, indicated about 25,300 jobs could have been lost in Newcastle and Lake Macquarie and 11,300 across the rest of the Hunter Valley.
“This suggests the region has a long road ahead to recover economically from the pandemic,” Mr Hawes said.
“I think the youth unemployment figures in Newcastle and Lake Macquarie, in particular, point to the impact on industries such as retail, hospitality, arts and entertainment and tourism, which traditionally employ high numbers of young people.
“Notwithstanding that youth unemployment is typically a volatile measure, the Newcastle figure is still significantly higher than anything we have seen in a long time.”
The May labour force statistics show the overall unemployment rate for Newcastle and Lake Macquarie has hit double figures, at 10 per cent (up from 7.7 per cent in April), with a lower rise across the rest of the Hunter Valley to six per cent (up from 5.3 per cent). Youth unemployment in the Hunter Valley has dropped to 9.5 per cent from 15.7 per cent.
“As we have pointed out before, the impact of JobKeeper subsidies, in addition to the number of people who have stopped actively looking for work because of the depressed job market, is likely to be keeping these figures artificially low,” Mr Hawes said.
Mr Hawes said Treasury statistics released yesterday indicated the extent to which businesses in the Hunter were relying on wage subsidies to stay afloat during COVID.
The postcode data shows nearly 18,500 businesses and not-for-profit organisations in the Hunter had JobKeeper applications processed in April. More than 1,000 applications came from Charlestown (1147) and Maitland (1104). Other areas in the region that saw high numbers of organisations applying for the subsidy were Newcastle (865), Cardiff (792), Belmont (758), Minmi (715), Merewether (668), East Maitland (629), Adamstown (628) and Cessnock (632).
“What this data suggests is that there is a strong case building for the federal government to maintain wage subsidies beyond September,” Mr Hawes said.
“Businesses will take much longer than first anticipated to bounced back from the crisis and rebuild their workforces.”