Few cheering end of tumultuous year

Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)


It appears few are cheering the end of a tumultuous year that saw devastating bushfires, floods and the coronavirus pandemic.

Australians has started 2021 on a downbeat note, faced with snap lockdowns across Greater Brisbane and reinstated border closures across the country.

In its first release of the year, the weekly ANZ-Roy Morgan consumer confidence index ticked down 0.1 per cent.

This compounded a two per cent drop just before Christmas when Sydney’s northern beaches also went into lockdown.

“Confidence usually rises over the holiday period,” ANZ head of Australian economics David Plank said.

The latest survey was taken before Queensland lifted its weekend lockdown on Monday evening.

Restrictions were also eased in the NSW northern beaches on Sunday.

“At this stage, health authorities and governments appear to have been successful at containing the virus outbreaks,” Commonwealth Securities senior economist Ryan Felsman said.

“(But) broader, deeper and longer lockdowns continue to pose a threat to consumer spending and confidence until vaccines are rolled out.”

The decline in confidence came after the confidence index hit a 13-month high earlier in December.

It is still up 66.8 per cent since hitting a record low when the pandemic first shook the Australian economy in March.

Such strength in confidence was reflected in November’s retail trade figures, which showed a huge 7.1 per cent surge in spending.

But according to research by professional services firm Accenture, consumers will approach 2021 more cautiously, with pre-Christmas pent-up demand satisfied and as support payments are scaled back.

Accenture’s Michelle Grujin says while people are optimistic about spending overall, uncertainties around when the next disruption will occur will keep them cautious.

“The gradual winding back of government support also means value-conscious consumers will be scrutinising and seeking out promotions – with nine in 10 Australians planning to spend the same, if not less, than last year to preserve household budgets,” she told AAP.

The way people pay for their shopping has also been altered by COVID-19 restrictions and with many retail outlets declining cash.

The Reserve Bank’s latest payments data shows while the value of ATM withdrawals were down 16 per cent in 2020, debit card transactions were up 23 per cent.


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