ANZ-Roy Morgan Consumer Confidence dropped 3.2% this week after new lockdowns were imposed with more than 15 million people now under stay-at-home orders in the country.

The new lockdowns in South-East Queensland and Victoria helped drive consumer sentiment under the neutral level of 100 for the first time since early November 2020. Consumer confidence in Queensland was down 7.8% from a week ago and down 3% in Victoria. However, although still the lowest of all the states, consumer sentiment in NSW increased from the previous week.

According to ANZ head of Australian Economics, David Plank, while confidence dropped in Brisbane and Melbourne, it rose in Sydney and the rest of NSW, as the vaccination rate picked up and some restrictions on construction work were eased.

“Sentiment is still above the level reached during Victoria’s long second lockdown, but it is now in pessimistic territory for the first time since early November last year. Our research suggests we can’t be sure the low in confidence in the current cycle has been reached until Covid case numbers start to trend lower.”

Current and financial indicators also declined although economic expectations rose slightly. However, the time to buy a major household item took a hit falling 4%, the lowest indicator for nearly a year.