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A global pandemic like COVID-19 is once in a lifetime. While we’ve been able to take some learnings from similar events in the past, this particular pandemic has brought its own set of challenges. Governments, businesses and individuals alike have been managing on a day-to-day basis – the reality is that no template or framework exists to guide our recovery. But is that about to change?

There is an opportunity to examine trends in human behaviour observed over the last few months to predict the road to recovery.

Since COVID-19 outbreak in Australia, there has been a correlation between – the decline in movement of people and economic activity. This could be for any number of reasons – fewer people going out for dinner, or to the local shops and spending money, or a decline in tourism dollars caused by border closures. Whatever the reason, data shows that the movement of people is a leading indicator of trends in economic growth.

At Intelematics, we collect traffic data through thousands of sensors located on roads, in vehicles and infrastructure. We use this data to gain insights into how people move across Australia. We recently used our real-time and historical road traffic data to analyse national traffic through the COVID-19 period, to understand people movement trends. Then, based on the correlation between the movement of people and economic growth trends, we analysed the data to predict the road to economic recovery – by when will the economy be operating as normal and the factors required to make it happen.

Before I delve into our analysis, it’s worth noting that while the movement of people is a leading indicator of economic activity, it’s by no means an exact science.

In Australia right now there is a correlation between the two factors – as the movement of people has trended down, so has the economy. This means as the movement of people begins to trend upward, we can expect to see the same for the economy. However, this doesn’t take into account the potential changing face of the economy – COVID-19 may encourage more people to work from home more often, or move most of their shopping online, which could potentially weaken the correlation. Having said that, while the two factors may not be so strongly linked forever, they are right now.

If 70% of the milestone announcements are positive and 30% negative, then the movement of people and economic activity will grow steadily week over week. Therefore, based on the current growth trend, we will be at 90% of normal traffic levels come 10 August 2020.

Our method

To conduct an analysis examining the movement of people since the outbreak of COVID-19, we plotted national traffic volume against 50 milestone announcements to measure their impact. 

These milestone announcements included:

  • 11 March – the World Health Organisation declared COVID-19 as a global pandemic 
  • 20 March – the Australian Federal Government enforced stricter social distancing restrictions
  • 3 May – the Australian Federal Government announced that restrictions across the country would begin to ease 
  • 11 May – restrictions officially began to ease 
How Intelematics used traffic data to predict when and how the Australian economy can return to normal

The average number of vehicles per sensor plotted against milestone COVID-19 announcements; this example shows the average number of vehicles when govt announced the easing of restrictions.

To gauge the impact of each milestone announcement (or message) on the movement of people, we compared traffic data from the day of the announcement against traffic data from the same day the previous week to determine a rate of change. The reason we had to compare it against the same day of the prior week, is that there are significant discrepancies between traffic on an average Tuesday compared with an average Saturday, as an example.

By doing this, we were able to assess the rate of change, and the impact each of the 50 milestone announcements had on the movement of people.

Our findings

Overall, COVID-19 and its associated government-enforced restrictions had a significant impact on traffic:

  • The biggest week on week fall in traffic volume was week commencing 23 March, when the government announced restrictions significantly limiting people’s movement. In this week alone, we observed a 32% fall in national traffic volume from the previous week.
  • Our data showed that national traffic volume reached its lowest point in the week commencing 6 April, when the number of vehicles on Australian roads sat at 33% of the standard national volume according to trend data.
  • From week commencing 13 April, we have seen a steady increase in traffic volume nationally, rising in small increments over the weeks.

However, using the methodology outlined above, we were able to examine the type of messages that had the biggest impact on the movement of people:

  • On average, a negative message (e.g. one that refers to restrictions, increase in cases, deaths) resulted in a 4% decline in traffic
  • On average, a positive message (e.g. easing of restrictions, decrease in cases) resulted in a
    3% growth in traffic

Then we took these findings to predict when and how the Australian economy can return to normal.

From our analysis, negative messages have a bigger impact on the movement of people than positive messages. Based on the premise that a negative message results in a 4% decline in traffic (on average), while a positive message results in a 3% growth in traffic (on average) and that the movement of people is a leading indicator for economic activity – we tested the following scenarios:

  • In the 12 weeks from 8 June, the ratio of negative to positive milestone announcements is 50:50
  • In the 12 weeks from 8 June, the ratio of negative to positive milestone announcements is 40:60
  • In the 12 weeks from 8 June, the ratio of negative to positive milestone announcements is 30:70
Intelematics Traffic Counts Forecast

The above shows that if positive and negative milestone announcements are made equally over the next few months, then the movement of people and economic activity will decline. 

If 60% positive and 40% negative milestone announcements are made over the next few months, then the movement of people and economic activity will plateau. 

If 70% positive and 30% negative milestone announcements are made over the next few months, then the movement of people and economic activity will grow steadily and be at 90% of the normal rate week commencing 10 August.

This means we need to receive 2.5 pieces of good news for every piece of bad news for the economy to be operating as almost normal within three months. 

However, if this forecast is met, the movement of people will still sit below 10% its normal rate. This may have a disproportionate impact on the economy, for example, bars, nightclubs and interstate travel, maybe harder hit than property, or retail. As we said, it’s not an exact science – but it’s a leading indicator of where we stand, and how we’re poised to recover. 

This study shows that the movement of people is so integral to our economy and way of life, and demonstrates the exciting potential of road traffic data to be used for so much more than just helping to optimise travel. Stay tuned for more use cases.