State of origin: spending rocked by lockdown

Victoria’s initially stricter lockdown seems to be behind the larger spending impact which is almost identical to spending impacts from the fourth lockdown in May.

It’s likely the impacts on Sydney’s spending will follow suit as the stricter lockdown restrictions flow through to the data.

ANZ Research expects Victoria’s spending to follow the same pattern as its fourth lockdown with an outperformance in spending right after the lockdown ends as households make up for lost time.

While the Sydney lockdown has so far led to a smaller impact per weekend, the risk of economic scarring increases as the lockdown intensifies and extends.

If Sydney’s lockdown starts to impact employment, there may be a more muted spending recovery.

National spending has been impacted by the lockdowns although spending outside New South Wales and Victoria looks broadly stable. South Australia’s lockdown will clearly change this.

Lockdowns have a national impact because of the large number of people affected but that hasn’t stopped non-lockdown states from spending as normal.

Adelaide Timbrell is Economist and David Plank is Head of Australian Economics at ANZ