The agriculture and tourism industries are bearing the brunt of this devastating forest fire wave, a direct consequence of global warming.
Australia’s 2019/2020 bushfire season has been one of the most catastrophic in history with disastrous results for biodiversity and the environment.
The economic impact cannot yet be accurately estimated but it has had a significant impact on business.
What is the impact on business and industry?
- Some businesses and institutions were forced to close temporarily due to air pollution levels. In the most affected places the air quality became more than 20 times higher than the limits of the danger level, causing the closure of restaurants, shops, offices, government departments, among other businesses.
- More seriously, those businesses whose infrastructure was affected had to take drastic measures and pause their operations, resulting in significant loss of income and assets.
- Consumer confidence fell by 6.2% in January 2020 compared to the same month last year, according to the Westpac-Melbourne Institute index, showing how it has affected consumption and people’s purchasing power.
- Agriculture has undoubtedly been one of the most affected economic activities. The fires caused crop and harvest losses. Additionally, pollutants released by fires can affect crop growth and vegetation hundreds of miles away from the area where the fires occurred.
Smaller industries, in some unique cases, have been severely affected, such as cherry production, forestry, and abalone production, which could take years to recover. Among these we find the beekeeping industry. More than 4,600 hives have been destroyed and another 23,000 suffered significant losses.
- According to the latest figures published by the government, more than 46,000 heads of cattle have been lost in the fires, which considerably affects the meat and dairy industries. Considering that Australia is the second-largest exporter of beef in the world, meat prices could increase.
Tourism represents 3.1% of Australia’s economy and employs 666,000 people, or 5.2% of the country’s workforce, according to government figures.
- Tourism has been hit hard, with fires occurring during the peak summer visitor season, the most active and profitable period for many Australian tourism businesses. Australian tour operators in the most affected areas say that the government’s ban on travellers to these areas has intensified the impact of the bushfires.
Similarly, Australia’s image as a tourist destination is being severely affected internationally.
In addition to the strain on the economy, there is the impact of smoke from forest fires on the surrounding metropolitan areas. At the height of the fires, when the smoke mist has been at its worst, both Melbourne and Canberra air quality were rated as the worst in the world.