Half of Australian businesses experienced an adverse impact from Covid-19 even before social distancing according to the Australian Bureau of Statistics.
Prior to phase 1 social distancing measures 49 per cent of businesses were fairing worse, although that amount is expected to move to 86 per cent as government measures increase and the coronavirus spreads.
Accommodation and food services bore the brunt of Covid-19 with 78 per cent recording negative impacts and 96 per cent expecting it to get worse.
Meanwhile the least impacted by the virus were businesses in professional, scientific and technical sectors with only 21 per cent affected; electricity, gas and water supply were 34 per cent; and mining was only 37 per cent.
A reduction in local demand was the most common problem experienced by 82 per cent of the businesses surveyed and was also the most common impact expected to get worse.
Of impacted businesses, more than a third had experienced staff shortages and 59 per cent expected to experience staff shortages in coming months.
Moody analysts said business activity was likely to fall sharply across advanced economies in the first half of 2020 and will recover slowly with consumer demand.
“We now expect G20 real gross domestic product to contract by 0.5 per cent in 2020, followed by a pickup to 3.2 per cent growth in 2021.
“In November last year, before the emergence of the coronavirus, we were expecting G20 economies to grow by 2.6 per cent in 2020.”
Globally, many authorities were adopting important policy measures such as income guarantees and regulatory forbearance in an effort to reduce the risk of simultaneous defaults weakening financial stability.
“We expect policy measures to continue to grow and deepen, as the consequences of the shock in terms of depth and duration become clearer,” Moody analysts said.
Despite the impact of Covid-19 only just hitting the Australian market, the uncertainty surrounding the economic outlook has already caused multiple ASX-listed companies to withdraw their guidance for the 2020 financial year.
However other businesses were adapting to altered consumer demand including alcohol distilleries who have started the production on ethanol for hand sanitiser.