CANBERRA, AAP – Consumer confidence has fallen across Australia as a result of the rapid spread of the Omicron strain of COVID-19, potentially dampening the outlook for retail spending.
In the first release for 2022, the weekly ANZ-Roy Morgan consumer confidence index dropped 2.2 per cent compared its pre-Christmas level – the last time the survey was conducted.
“The rapid rise of Omicron cases across Australia is likely responsible for the dampened outlook in the first week of January,” ANZ head of Australian economics David Plank said.
“Confidence fell in all the major capitals, with Adelaide faring the worst.”
Mr Plank noted that in the decade from 2011 to 2020, consumer confidence had risen 2.6 per cent on average in the first survey in January.
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“So this result is even weaker than it seems,” he said.
Consumer confidence provides a guide to future retail spending.
The Australian Bureau of Statistics will release retail sales figures for November on Tuesday.
Economists’ forecasts point to another strong result of 3.8 per cent, building on the 4.9 per cent increase in October as NSW, Victoria and the ACT emerged from last year’s extensive lockdowns battling the Delta strain.
However, an analysis by ANZ last week showed spending in the week to January 5 was at its lowest level since these lockdowns as consumers showed caution about being in public places because of Omicron.
This has been compounded by staff shortages, while supply chain disruptions are leaving some supermarket shelves bare.
Still, the confidence survey found respondents are still relatively happy about their own financial circumstances.
The sub-index for views on ‘current financial conditions’ increased by 1.4 per cent, while ‘future financial conditions’ rose by 0.7 per cent.
“This potentially sets things up for a rapid rebound once people are more confident about health outcomes,” Mr Plank said.
That said, views on ‘current economic conditions’ slumped 8.7 per cent to the lowest level since September last year when the economy was in contraction from having over half the population in lockdown. .
The ABS will also release international trade figures for November.
Economists’ forecasts centre on a surplus of $10.7 billion compared with $11.2 billion in October.
Economists at Barclays, who are expecting a smaller $10.2 billion surplus, said this further winding back from the record $14 billion surplus in August is the result of declining commodity prices.