The wage bill for businesses during the pandemic tumbled by a record amount during the June quarter as COVID-19 lockdowns and a sharp rise in unemployment took their toll.
Australian Bureau of Statistics data showed wages and salaries slumped 3.3 per cent during the quarter to be even weaker than the 2.3 per cent fall recorded in the June quarter of 2009 and at the time of the global financial crisis.
But the bureau’s business indicators report for the June quarter also showed company profits jumped by 15 per cent when economists had expected a fall, which it attributed to government subsidies during the pandemic.
Business inventories – stock on shelves and in warehouses – dropped three per cent in the June quarter.
The data feeds into Wednesday’s national accounts.
Prior to Monday’s data, economists’ forecasts centred on a contraction of around six per cent drop during the June quarter, marking the biggest decline since the ABS started plotting the national accounts in the late 1950s.
This sharp fall follows a more modest 0.3 per cent decline in the March quarter and constitutes a technical recession of two consecutive quarters of contraction.
It would be the first recession in almost 30 years.