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Consumer Confidence Remains Uncertain with Ongoing Sydney Lockdown
As Victoria emerges from lockdown today, consumer confidence remains lower than normal – dropping by a further 3.6pts to 100.7.
This is one of the lowest consumer confidence levels for the year, well below the 2021 average of 110.6. However, this week is 11.7 points higher than the same week in 2020.
Last week, consumer confidence experienced a drop of 5.7 points, which was the sharpest dip since March 2020.
In major cities such as Sydney, which has been in lockdown for more than five weeks, consumer confidence has remained below 100 points. Sydney has experienced a dip of -2.2 percent to 99.3, and Melbourne is down -6.4 percent to 99.
“Consumer confidence fell by 3.5 percent last week, to its lowest since early November 2020 right after Victoria’s long second lockdown,” explained David Plank, the ANZ Head of Australian Economics. “Confidence fell in both Sydney (-2.2 percent) and Melbourne (-6.4 percent), but rose in Adelaide a touch (0.5 percent). Even with a much higher case load and longer lockdown, confidence in Sydney is a bit higher than in Melbourne.”
Only 34 percent of Australian consumers say that ow is a ‘good time to buy’ a major household item, experiencing a drop of two ppts. In contrast, 35 percent say that now is a ‘bad time to buy’ a major household item – an increase of five ppts.
“We would note that even during Melbourne’s long lockdown in 2020 confidence levels in the two cities remained close. Sentiment declined in Brisbane (-6.1 percent) and Perth (-4.6 percent) despite the absence of lockdowns in those cities, further highlighting the interrelated nature of sentiment across Australia,” said Plank. “Confidence remains well above the lows seen in the early stages of the pandemic, suggesting the economic hit from the current lockdowns will be less than that seen in the second quarter of 2020.”