CANBERRA, AAP – A series of virus lockdowns has put a further dent in consumer confidence, reeling to its lowest level in nine months.
The weekly ANZ-Roy Morgan consumer confidence index dropped 3.1 per cent to 98.6, a level not seen since November last year when Victoria ended its second long lockdown.
A level below 100 indicates there are now more pessimists than optimists, a further worry for retailers that have already been hit by a number of lockdowns across the nation.
“Our research suggests we can’t be sure the low in confidence in the current cycle has been reached until COVID case numbers start to trend lower,” ANZ head of Australian economic David Plank said.
In the past week, there have been fresh lockdowns in Queensland and Victoria, resulting in a 7.5 per cent drop in confidence in Brisbane and a 1.6 per cent decline in Melbourne.
Perversely, confidence in Sydney and the rest of NSW reversed some of the recent sharp decline, rising 3.7 per cent and 2.1 per cent respectively, despite remaining in a lengthy shutdown that will extend until the end of August.
Mr Plank put that down to the vaccination rate picking up in the state and the easing of some restrictions on construction work.
With half of the population in lockdown, economists are predicting the economy will contract by around 1.5 per cent in the September quarter, bringing the strong recovery from last year’s recession to an abrupt halt.
But trying to put that into context, Treasurer Josh Frydenberg said the economy contracted by a full seven per cent in the June quarter last year, when the virus was at its peak across the country.
“There are some big challenges for the economy, but I want those people … to be confident, to be optimistic and to know there is going to be light at the end of this tunnel,” he told the Seven Network.
But shadow treasurer Jim Chalmers noted nobody in intensive care in NSW has had two jabs of a coronavirus vaccine.
“That really brings it home, I think, to Australians how important vaccinations are and how costly the prime minister’s bungling of that vaccine rollout is – causing these lockdowns, all of this economic carnage, all of this social dislocation,” Dr Chalmers told the Nine Network.
The influential monthly National Australia Bank business survey for July is also released on Tuesday – a pointer to future investment and hiring.
Business confidence fell in June, capturing the early stages of the Greater Sydney lockdown.
“Lockdown measures have since been increased and broadened – most notably in Greater Sydney – so we look for another sharp decline in this week’s July survey,” JP Morgan economist Ben Jarman said.