Consumer confidence set to fall further, after Westpac gauge sinks 6pc

Westpac’s confidence gauge sank 6pc in July as Melbourne faced a new virus lockdown, but before Sydney’s fresh outbreak.

Melbourne new lockdown dealt a blow to consumer confidence. Picture: Ian Currie

Consumer confidence is tipped to plummet further following the lockdown of more than five million Victorians and news of fresh cases of coronavirus in Sydney.

Westpac’s closely watched monthly confidence gauge sank 6 per cent in July compared to June, reversing the gains in the previous month when it seemed coronavirus cases had abated.

“Sentiment has been rocked by the resurgence in coronavirus cases over the last month,” said Westpac chief economist Bill Evans.

“It is of some concern that the survey predates the news of a significant cluster of cases in Sydney which emerged last weekend – a day after the end of the survey,” he added.

The fall in July nevertheless left the confidence index, which is based on a survey of 1200 adults, 16 per cent higher than in April, which was the lowest reading in history.

Mr Evans said the timing of the survey was “relevant”.

“It covered the week in which the lockdown was announced for Melbourne but the survey closed before the news of a significant cluster was reported for Sydney,” he explained.

Across the states the biggest drop in confidence occurred in Victoria, which has imposed a six-week lockdown in Melbourne to snuff out an acceleration in new coronavirus cases.