The latest ANZ-Roy Morgan consumer confidence survey shows Greater Sydney and Melbourne lockdowns have seen consumer confidence fall to 104.3 points, with a score above 100 showing optimism in the future.

The 5.7-point fall over the last week means consumer confidence is now at its lowest point since November 2020.

In a concerning development, the consumer survey revealed that less than one in six Aussies now expects ‘good times’ for the economy over the next 12 months, while nearly a quarter expect ‘bad times’ ahead.

Extended out to over the next five years, less than one in five is predicting a strong economy, while 17 per cent are predicting bad economic times to come.

ANZ’s head of Australian economics, David Plank, said a lack of consumer confidence will have an impact on spending and the economy at large.

“The subindices that capture economic conditions and ‘time to buy a major household item’ are at their worst levels since early November 2020, highlighting some renewed caution of households – albeit nowhere near the lows seen in the early stage of the pandemic,” the economist said.

However, in positive news for the economy, the number of Australian families conceding they are ‘better off’ financially has now increased to 29 per cent, albeit 28 per cent say they are ‘worse off’.

The research also revealed that 38 per cent of Australians expect their family to be better off financially this time next year, compared with just 17 per cent of Aussies who are expecting to be ‘worse off’ financially.

Australian economy set to take a hit

A lack of consumer spending is not the only headwind the economy faces, with the current lockdown restrictions forcing businesses to close.

Commonwealth Bank’s head of economics Australia, Gareth Aird, told nestegg that current lockdowns are set to cost billions.

“With new restrictions on retail and construction, the cost of Greater Sydney lockdown has increased to around $2 billion a week. Cost of the Victoria lockdown is around $1 billion a week,” Mr Aird said.

He explained the combined cost per week in current form is $3 billion, which is worth 0.15 per cent of annual GDP or 0.6 per cent of quarterly GDP.

While the government’s latest government data has revealed that as many as 331,000 disaster payment claims worth $155 million have already been granted across locked-down Sydney and surrounds, this is unlikely to help the broader economy.

When asked if the government’s package will offset the losses, Mr Aird said, “Yes, not in terms of GDP lost during the lockdown, but income payments will support a swift bounce in activity once restrictions are eased.”