Omicron catches up with consumer confidence after first Christmas shopping
And ANZ Australian chief economy officer David Plank said on Tuesday that consumer confidence fell 2.2% in early January compared to pre-Christmas figures. In general, consumer confidence improves at the start of the year.
“The rapid increase in Omicron cases across Australia is likely responsible for the deteriorating outlook in the first week of January. Confidence has fallen in all major capitals, Adelaide being the worst,” a- “The good news is people are still relatively happy with their own finances. This potentially sets things up for a quick rebound once people are more confident about the health outcomes.”
More people were confident about current and future financial conditions, but there has been a sharp drop in confidence in current economic conditions, with this measure now at its lowest level since September. Fewer people thought it was a good time to buy an important household item.
BIS Oxford Economics Senior Economist Sean Langcake said discretionary spending in November was strong, with revenue helped by an extended selling period and buyers concerned about inventory availability and on-time delivery as Christmas approaches.
“Disruption from the Omicron variant (…) will pose a challenge in early 2022. Consumer cautiousness will reduce in-store foot traffic, while disruption to supply chains and labor availability ‘artwork will further limit sales, ”he said.
Indeed’s Asia-Pacific economist Callam Pickering said Black Friday sales helped generate the $ 33.4 billion monthly “bumper” before Christmas, along with the revival of the government and the end of the blockades.
“Unfortunately, this may prove to be short-lived, with growing evidence that spending declined towards the end of December and into January in response to the growing threat from Omicron,” he said. “January, and more generally in early 2022, could prove difficult for retailers as Omicron encourages more risk averse consumers to stay home. ”
Australian Retailers Association chief executive Paul Zahra said retailers were being challenged because of Omicron, which affected labor, supplies and deliveries.
“November was very different from what retailers are currently facing… As Omicron has established itself in recent weeks, we have seen that some companies have had to limit their trading hours due to the number of isolated employees, while others have had to completely close stores in some places, ”he said.
CommSec chief economist Craig James said Australians were in “relax mode, not spend mode” with more people taking vacations this year, and sentiment was holding up surprisingly well given the increase. coronavirus cases.
“Omicron cases are expected to peak in most states over the next few weeks, and then herd immunity and high vaccination rates are expected to kick in, reducing the pressure currently being felt on the healthcare system. Australian consumers are alert, not alarmed.
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