ANZ Bank says Australians are spending less than ever in the New Year

Australians’ spending levels have plummeted to a level not seen since lockdowns at the height of Delta – an ominous sign for the nation’s economy.

ANZ Bank has revealed Australians have been spending money at record lows in the New Year, with spending levels in the nation’s two biggest cities resembling those seen during last year’s Delta-prompted lockdowns.

In a report released on Friday, ANZ’s senior economist Adelaide Timbrell said people’s caution towards being in public places was being compounded by staff shortages to “stifle spending across dining, retail and travel”.

Spending in Sydney and Melbourne in particular has dropped to levels resembling hard lockdown conditions as seen in 2021. In Sydney, spending has hit its lowest point since the pandemic hit our shores in early 2020.

“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,” Ms Timbrell wrote.

ANZ also observed a sharp spending decline 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 New South Wales is closer to out-of-lockdown times in 2021,” the report continued.

We are locking down.https://t.co/iDp1h1dGHX#omnicron#nsw#auspol#auseconpic.twitter.com/KUCZPqkg0X

— Peter Martin (@1petermartin) January 7, 2022

ANZ’s head of Australian economics David Plan 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 per cent 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.

ANZ has reported a plummet in consumer spending in the New Year as Australians respond to the Omicron case boom.

The new data came after the Transport Workers Union warned Australia could soon face a supply chain crisis if too many transport workers were forced off the job due to isolation requirements.

TWU national secretary Michael Kaine said the lack of readily-available rapid antigen tests could contribute to the burgeoning supply chain issue, which has already seen Coles impose buying limits on meat.

“Supply chains are starting to grind to a halt because of the virus. Now, these RATs are needed to clearly manage the spread of the virus because we need transport supply chains to be safe,” he said via Business Insider.

“And for so long as free and readily available testing isn’t there, then we’re going to continue to maximise the spread of the virus.”