The Coming Economic Impacts of Omicron

The economic impacts of covid so far in Australia have been huge. Extended lockdowns in NSW and Victoria have cost a huge pile of billions.

But now we’ve opened up and Omicron is on the scene, I can see further economic impact. The growth rate of Omicron is so fast, it looks like most of Australia will get the virus within the next couple of months.

When people catch it, in some cases, they’ll be out of the work force for a couple of weeks or so. This will affect the economy for sure.

We’re seeing this start to happen already:

Purchasing limits introduced in supermarkets due to staff shortages

Half of supermarket truck drivers abscent due to covid

What will it look like by, say, the end of January? Hard to get good numbers given our inability to test enough people for covid. Current figures give us 318K active cases, but there are certainly more than that out there, but Let’s say 300K cases. Omicron in Australia has a doubling rate of about 3 days. Let’s say we have two doublings per week (that’s being conservative). If we have 1 doubling for the rest of this week, then two a week for the rest of the month, 300K turns into 38 million.

We’ve got 24 Million people so that’s not going to happen, but the point is, by the end of January, pretty much all of Australia will get covid. We won’t see it in the numbers as we can’t even test enough now, but those with symptoms will be required to stay home.

It will be a remarkable set of circumstances, where most of the workforce will be off sick all at the same time. And the difference with this and the previous covid lockdowns will be that previous lockdowns hit certain industries hard and others not. This will be indiscriminate and probably expose all and any industry equally.

Let’s see how it plays out.