People cross a busy street under holiday decorations in the city centre of Sydney, Australia, December 17, 2020. REUTERS FILE PHOTO
SYDNEY — A measure of Australian consumer sentiment took a step back in December as an outbreak of the Omicron variant clouded the outlook for the economy and spending over the Christmas period.
The Westpac-Melbourne Institute index of consumer sentiment released on Wednesday fell 1.0% in December, wiping out November’s 0.6% gain.
The index reading was down 6.9% on December last year, though at 104.3 it meant optimists still outnumbered pessimists.
Westpac chief economist Bill Evans noted there were sharp falls in New South Wales and Victoria where COVID-19 cases were highest. The survey also found more concern about rising inflation, which may have hurt spending plans.
The survey’s measure of whether it was a good time to buy a major household item slid 5.3% in December, to be down more than 13% on a year ago.
“The strong growth outlook we see for 2022 is dependent on a surge in consumer spending, as households re-emerge from restrictions and draw down on the large savings accumulated through the COVID lockdown periods,” said Evans.
The survey’s measure on the economic outlook for the next 12 months dipped 1.6% in the month, while that for the next five years eased 0.5%.
In contrast, the measure of family finances compared with a year ago firmed 1.0%, while that for finances over the next 12 months rose 2.1%.