State economies and the stringency of COVID-19 containment measures, December quarter 2020

Released
3/03/2021

Many states and territories continued to ease containment measures over the December quarter. Victoria began easing stage 4 restrictions from late September, and progressively reduced their stringency. By early November, Victoria’s stringency levels were comparable with other states.

The Parafield cluster in South Australia, and the Northern Beaches cluster in New South Wales led to the rapid implementation, and subsequent relaxation, of restrictions on the movement of people within jurisdictions. By contrast, previous outbreaks had been characterised by a gradual implementation of progressively stricter containment measures, and gradual relaxation.

Continuing the analysis published in the September quarter, the ABS has applied the methodology developed for the Oxford COVID-19 Government Response Tracker to each of Australia’s eight states and territories. Eight indices have been produced measuring the stringency of a state government’s response to COVID-19, with a score of 100 indicating a maximum level of restrictions.

Stringency of state and territory governments' responses to COVID-19 over the September and December quarters 2020

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The state level index excludes the impact of federal policies and advice such as international border closures and the federal public health campaign.

The stringency of each government's response, and subsequent easing of restrictions, had an impact on economic activity in each jurisdiction. State final demand, a measure of consumption and capital expenditure, is the best available indicator of quarterly economic activity for each state or territory. Substantial relaxation of restrictions and resulting changes in consumer behaviour had a positive impact on the consumption of goods and services.

Change in the average stringency of government response and growth in final demand, by State and Territory, from September quarter to December quarter 2020

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State final demand in seasonally adjusted volume measures. Negative change in the stringency index indicates easing of restrictions. Stringency index excludes the impact of federal policies such as international border closures and the federal public health campaign.

Household spending makes up the largest share of final demand in each state, and the impact of easing restrictions on movement is also evident here.

Change in the average stringency of government response and growth in household spending, by State and Territory, from September quarter to December quarter 2020

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Household consumption in seasonally adjusted volume measures. Negative change in the stringency index indicates easing of restrictions. Stringency index excludes the impact of federal policies such as international border closures and the federal public health campaign.

Throughout the pandemic, spending on services across all states and territories was limited by physical distancing requirements and restrictions such as stay-at-home orders, closures of non-essential services, the cancellation of public events, and restrictions on gatherings. As these eased, spending on services increased across all states and territories. For further analysis of household consumption see Insights into household consumption.