The first consumer confidence figures of 2022 suggest that Omicron is already suppressing the spending appetites of Australians.
A surge in COVID-19 cases amid the spread of the Omicron variant has seen Australian consumer confidence decline.
According to the latest ANZ-Roy Morgan Consumer Confidence tracker, consumer confidence fell 2.4 points over the first week of 2022.
This fall puts it 2.9 points below levels seen during the same period of 2021.
ANZ head of Australian economics David Plank said that consumers began 2022 on a downbeat note, citing a 2.2 per cent decline relative to pre-Christmas levels.
“The rapid rise of Omicron cases across Australia is likely responsible for the dampened outlook in the first week of January,” he said.
ANZ’s data suggested that consumer confidence fell in all Australian capital cities, with Adelaide emerging as the worst-affected.
Mr Plank added that consumer confidence typically rises 2.6 per cent on average during this period of the year, “so this result is even weaker than it seems”.
“Consistent with the drop in confidence, ANZ-observed spending is at its lowest level since the Delta lockdowns,” he said.
According to ANZ’s latest Australian Economic Insight report, consumer spending during the first week of 2022 was at its lowest level since the Delta outbreak.
ANZ Senior economist Adelaide Timbrell said that consumer spending across Sydney and Melbourne was now comparable to the levels seen during recent lockdowns, with the former said to be at its lowest point since the onset of the pandemic.
“Caution about being in public places is being compounded by staff shortages to stifle spending across dining, retail and travel,” she said.
Mr Plank said that one silver lining here is that consumers are still relatively happy about their own financial circumstances.
“This potentially sets things up for a rapid rebound once people are more confident about health outcomes,” he said.
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