Fewer businesses worry over JobKeeper end

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Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)

 

Fewer businesses are concerned about the impact the end of the JobKeeper wage subsidy might have than they were six months ago.

KPMG’s pre-budget survey of 100 medium-sized business found only a third of firms now expect last month’s demise of this key support measure during the pandemic will lead to a significant decline in economic activity.

That compared with two-thirds of respondents who were polled prior to last year’s October federal budget.

KPMG’s Clive Bird said it was heartening to see businesses are feeling upbeat and less fearful of JobKeeper ending.

“Many have accessed government support schemes over the past year and are now emerging with confidence,” Mr Bird said.

Backing that confidence was the latest Westpac-Melbourne Institute leading index, which continues to point to solid economic growth above the long term annual trend rate of around 2.8 per cent over the next three to nine months.

Westpac chief economist Bill Evans is predicting a growth rate of 4.5 per cent in 2021 and largely driven by consumer demand, which is expected to contribute three of those percentage points.

“The reopening of the economy, cashed up households and an 11 year high in consumer sentiment all point to strong spending,” Mr Evans said.

Such strength in confidence is expected to be reflected in preliminary retail spending figures for March, which the Australian Bureau of Statistics will release later on Wednesday.

Economists expect spending grew by a solid 1.0 per cent in the month, rebounding from the 0.8 per cent decline in February.

This expected bounce in spending comes after the snap lockdowns in Victoria and Western Australia weighed on the February result.

The National Skills Commission will also release its final report on job vacancies posted on the internet for March.

Its preliminary data showed job advertisements soared 19.1 per cent in March to a 12-year high.

This was the 11th consecutive monthly increase in job ads and a staggering 96.4 per cent increase above the level recorded in March 2020, the first month restrictions were introduced because of the COVID-19 pandemic.

Other gauges of job advertising, which are a guide to future employment outcomes, have also been upbeat and suggest there is momentum in the economy to absorb jobs losses as a result of the end of JobKeeper.

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