The post-Christmas spending blitz fizzled as consumers stayed indoors and businesses scrambled to stay open amid crushing staff shortages.
According to the latest ANZ spending data, nearly all capital cities had some of their lowest spending results since COVID began nearly two years ago.
Spending in Sydney and Melbourne is now near levels typical of lockdown conditions as caution about being in public places is being compounded by staff shortages to stifle spending across dining, retail and travel.
Dining spending in Queensland and Western Australia resembles previous lockdown conditions, while non-food retail spending outside Victoria and NSW is closer to out-of-lockdown times in 2021.
The ANZ data shows that in Melbourne specifically, and Victoria overall, spending is not as low as during Delta lockdowns and it recovered faster after Delta lockdowns than Sydney, which seems to have been hit harder by interstate travel rules through the last year.
ANZ observed spending has also fallen sharply in Queensland, South Australia and Western Australia since the Christmas trading period, with spending in all states a little lower than 2021’s out-of-lockdown levels.
Dining spending in Queensland and Western Australia resembles previous lockdown conditions, while non-food retail spending outside Victoria and NSW is closer to out-of-lockdown times in 2021.
ANZ’s head of Australian economics David Plank said the new data was proof a large number of Aussies in metro areas had begun to lock themselves down as Omicron cases spread like wildfire.
“The data shows starkly how behaviour is impacted by surging case numbers even without government intervention,” he said via Business Insider.
“A big issue this time is there is no government support as we aren’t formally in lockdown. It will be interesting to see how governments, federal and state, respond to this.”
According to Bloomberg, economists have already lowered their forecasts for the first three months of 2022, however there’s “still no shift in the prevailing view that the Reserve Bank will taper or end its $4 billion a week bond purchases at its first meeting of the year next month”.
Capital Economics also warned of an incoming “consumption stagnation” for Australia, predicting slower first-quarter consumer spending trends, down from a previous forecast for a 1.5% rise.
“Perhaps a bigger headwind to the recovery are mounting problems on the supply side as a rising number of workers are forced to isolate,” senior economist at Capital Economics Marcel Thieliant said.
