We’re 18 months into living with COVID-19, and as with any mass disruption, there have been winners and losers.
It’s been a profitable time for billionaires, with the US’s billionaire class alone increasing their combined wealth by $US1.2 trillion since the pandemic began, according to Forbes.
Amazon’s first quarter earnings for 2021 were $US108.5 billion, up 44% from last year. Its market capitalisation of $US1.75 trillion is almost double Australia’s forecast debt of $1 trillion.
The other top digital companies, including Apple, Microsoft, Google, Facebook, and Netflix have also profited greatly.
Pharmaceutical companies have enjoyed massive growth – Moderna’s share price has gone from roughly $US19 in 2020 to a high of $US234.30 in July 2021.
Digital adaptability and economy of scale have been the keys for COVID winners. The pandemic closed physical outlets and forced people online. Those with a strong digital presence that made it easy for customers were the ones who benefited.
Savvy Dealers already knew this. They would have seen the trend amongst car buyers towards conducting the vast majority of their research online before even setting foot in a dealership. All COVID did was cement that behaviour.
Initially, the retail automotive industry took a hit along with the wider economy amidst the uncertainty of shutdowns, layoffs and no real idea of how long we’d have to endure this thing before things could start getting back to normal.
In 2020 Australians bought a total of 916,968 new vehicles, down 13.7% on 2019. However, we’re already seeing a bounce-back. July 2021 sales were up 16.1% on the same month last year, despite local COVID-19 restrictions and continuing supply chain challenges.
Incentives and infrastructure investment have driven electric vehicle (EV) sales. In Victoria, EV sales were up 191.1% and Plug-in Hybrid Vehicles (PHEV) up 161.3% compared with July 2020. In NSW, EV sales increased by 260% and PHEV by 84.9%.
JobKeeper helped. It put money in people’s pockets – and given they couldn’t go anywhere – contributed to increased household savings. People accustomed to jetting off overseas instead spent the money on renovations, or a new car.
According to Sarah Hunter, chief economist with BIS Oxford Economics, the average household is better off financially than before the pandemic began.
After the first COVID lockdowns last year, the household savings rate, the measure of the percentage of household disposable income saved every month, rose to 22%, its highest level in over six decades. It’s currently around 20%.
“To put that into context, pre-pandemic it was more like 5% so it’s a huge increase,” Ms Hunter said.
“Generally across the country, there’s also a lot of activity we couldn’t do, and so there we just had a whole glut of spending that couldn’t take place. And that’s really what drove the savings rate up.”
So, Australians have more money in the bank, and nowhere to go to spend it. Sounds like an opportunity.