New economic analysis conducted by Deloitte found that Victoria has been the hardest hit of all states and territories, and that the Melbourne CBD isn’t set to return to its pre-COVID peak of $74 billion until the second half of 2024.
“The economic toll of the pandemic on Melbourne occurred not just in 2020, but has lasted as restrictions ease in 2021, with the city having far more economic ground to recover than other capital cities,” the report said.
Conducted in May, the analysis does not, however, account for Melbourne’s latest lockdown last month, nor Sydney’s current lockdown restrictions. Even so, the findings suggest that it could take Sydney as long as five years to reach pre-pandemic employment levels.
But Sydney is forecast to get back within 1.0 per cent, or 3,400 workers, of pre-pandemic levels — narrower margin than the 5.6 per cent, or 19,700 workers, below pre-pandemic levels forecast for Melbourne employment by the start of 2025.
Meanwhile, in Adelaide, employment is forecast to return to pre-COVID levels at the start of 2026, and both Brisbane and Perth are set to reach employment of people working in both CBDs during 2023.
The firm analysed Google mobility data to measure the number of people attending workplaces relative to before COVID-19, and found that, in the June quarter of 2020 — when the impacts of COVID-19 were felt across the nation — CBD workplace mobility plummeted most in Sydney and Melbourne.
In Sydney, mobility dropped by -62 per cent, and in Melbourne, it dropped even further, by -67 per cent.
The downward workplace mobility trends in both cities are attributed by the report to a surge in pandemic-induced remote work — a trend that is likely to continue after the pandemic, and further damage the economic recoveries of both CBDs.
Deloitte’s analysis showed that the majority of all work done by employees of Melbourne-based organisations was being done remotely in the June quarter of 2020, and as many as half of them continued to do so into the March quarter of 2021, even under eased COVID-19 restrictions.
It’s a trend that has “significant implications” for measuring Melbourne’s economic recovery, according to the report.
“A very large share of employment that would typically be measured as Melbourne-based — using the place of work measure — has not actually been occurring in Melbourne,” the report said.
“This also has large flow-on impacts to CBD spending as fewer people are travelling to Melbourne and spending money in the city.”
John Buckley is a journalist at Accountants Daily.
Before joining the team in 2021, John worked at The Sydney Morning Herald. His reporting has featured in a range of outlets including The Washington Post, The Age, and The Saturday Paper.