4 Mar 2022

Consumer confidence down as Omicron cases increase

11:03 am on 4 March 2022

Consumer confidence has plummeted to a record low amid the rapid spread of the Omicron variant.

People shopping at Sylvia park keeping social distancing

File photo. Photo: RNZ/ Marika Khabazi

The ANZ-Roy Morgan Consumer Confidence Index for February fell 16 points on the previous survey in December to 81.7 - which is the lowest reading since ANZ began collecting data in 2004.

A net 21 percent of respondents thought it was as a "terrible" time to buy major household items, which is a key indicator of consumer confidence.

ANZ chief economist Sharon Zollner said the Omicron outbreak had added to the pressures households were also dealing with, such as rising inflation, higher interest rates, a cooling housing market and the tighter cost of living.

"But these aren't new. Omicron is the big news this month, and it seems to have had an enormous impact across the whole survey," Zollner said.

Consumer's perceptions of their current economic situation had deteriorated as did the proportion of respondents who thought they would be better off in a year's time.

In contrast, Omicron had a much more muted effect on consumer confidence in Australia.

Zollner said the new variant probably came as less of a shock to Australians, insofar as the Delta outbreak was more significant there.

In contrast, this is the first time most New Zealanders have faced a significant chance of catching the virus, she said.

"This month's data looks grim, but there are undoubtedly some temporary impacts in there.

"Time will tell what the other side looks like, but we do know that Omicron is fast and furious, and will blow through relatively quickly."

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