Covid-19 has cut spending and cash withdrawals by almost 60% in one month, according to a research paper from the Central Bank.

The bank has been developing real-time indicators of economic developments during the crisis, and a second study in collaboration with jobs platform Indeed, written by CBI economist Reamonn Lydon and Indeed economist Pawel Adrjan, shows that job postings on the site fell by almost a third compared with a year earlier.

The impact on the labour market by April 3 was that job adverts were down almost a third on average, with some sectors directly affected by the virus suffering declines of up to 80%. Hospitality and tourism postings were down by 76%, for example, while worst affected was beauty and wellness with a fall of 80% in job offers.

The authors found that job postings have generally fallen by 30% to 40% in countries with a higher proportion of people in occupations with lower work-from-home potential. This includes Ireland, the UK, Portugal, Spain, Canada and Australia, where the percentage of employment in lower work-from-home occupations ranges from 50% to 60%.

At the same time, a separate study from CBI economists Andrew Hopkins and Martina Sherman shows how debit and credit card spending initially increased but fell away rapidly once strong restrictions on movement were imposed.

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Spending activity on cards initially increased by 22%, on Thursday 12 March, relative to the average of the previous 11 days, as the media reported bulk buying following the government announcement the same day. 

But the value of both card spending and ATM withdrawals declined rapidly from Monday 16 March. By the time the stay-at-home order was announced on 27 March, the value of card spending had already declined by over a fifth since the first week of March, while the value of ATM withdrawals was down over 40%.

This pattern continued into the first week of April, with card spending down by almost one third and ATM withdrawal amounts down 57% on the first week of March. 

“If the current level of spending and ATM withdrawals were to continue for the remainder of April 2020, it is estimated that overall card spending and cash withdrawals would be €2.6 billion or 40% lower than in April 2019,” the authors say.

Unsurprisingly, the amount of the average cash withdrawal has risen even as the total fell, as people reduced the number of visits to ATM machines, jumping to €189 early this month compared to €137 in the first week of March and €133 over the previous 12 months.