Restricted mobility through the pandemic reduced consumer demand and limited the ability of businesses to supply goods and services to households. Household spending accounts for over half the economy and drove GDP contractions during the pandemic. This relationship is further explored by comparing mobility to retail and recreational locations with growth in household spending since the beginning of the pandemic (figure 3).
Containment measures were strongest in the June quarter 2020, resulting in a 22.4% fall in average visits to retail and recreational locations compared to the previous quarter. Consumers adhered to the restrictions and household spending declined by a record 12.3% for the quarter, which drove a 7.0% fall in GDP. The decline in GDP in June quarter 2020, the height of the pandemic, was of similar magnitude to many other OECD countries.
Mobility increased strongly in subsequent quarters as low case numbers in most states and territories allowed COVID-19 restrictions to ease at a faster rate than most OECD countries. This resulted in increased household spending and a quicker economic recovery in Australia.