Several confidence reports due in the next week are unlikely to show Australians or businesses being as optimistic as Reserve Bank of Australia governor Philip Lowe.
More than half the population have been enduring a lockdown or some sort of virus-related restrictions in the past week, and for Sydneysiders, new virus cases remain huge and the death toll is rising.
Data in the past week alone has shown the negative impact of these shutdowns, which are expected to result in an economic contraction in the September quarter and a rise in the unemployment rate.
“The direct cost of the lockdowns since May in terms of lost economic activity has now been pushed out to around $16 billion,” AMP Capital chief economist Shane Oliver estimates.
But facing federal politicians last week, Dr Lowe remained confident that the economy will quickly bounce back once restrictions are eased and that a second recession in as many years will be unlikely.
“While the exact timing of the bounce-back is difficult to predict, it is likely to start well before the end of the year,” Dr Lowe told the House of Representatives economics committee during his twice-yearly hearing.
The confidence reports will give an indication of future household spending among individuals and investment and hiring plans of business.
The influential monthly National Australia Bank business survey for July is released on Tuesday.
Business confidence fell in June, capturing the early stages of the Greater Sydney lockdown, which has since been extended to at least the end of August.
Victoria has also re-entered lockdown, and while a relatively short shutdown in south east Queensland is due to end on Sunday, Cairns is now facing a three-day lockdown.
Business conditions also wound back from record highs, which were seen as reflecting an earlier lockdown in Victoria in May,
The weekly ANZ-Roy Morgan consumer confidence index is also released on Tuesday.
Last week the index surprisingly gained 1.1 per cent, with rises Victoria and South Australia disguising a further seven per cent slump in Sydney.
Confidence was also up in Brisbane, although the survey was largely conducted before south east Queensland went into lockdown.
The monthly Westpac-Melbourne Institute consumer sentiment survey is released on Wednesday.
Despite all the doom and gloom, Australian shares are going from strength-to- strength, and are set to make further record levels on Monday, spurred on by gains on Wall Street following a strong jobs report.
US non-farm payrolls increased by 943,000 in July compared with an 870,000 expected increase.
The Dow Jones Industrial Average rose 144.78 points, or 0.41 per cent, to 35,209.03 and the S&P 500 gained 7.49 points, or 0.17 per cent, to 4,436.59, but against the trend, the Nasdaq Composite dropped 59.36 points, or 0.4 per cent, to 14,835.76.
In response, Australia share futures were 30 points, or 0.4 per cent, higher at 7445.
On Friday, the benchmark S&P/ASX200 index closed higher by 27.3 points, or 0.36 per cent, to 7538.4.
Australia’s reporting season ramps up this week, including announcements from Commonwealth Bank on Wednesday, Telstra on Thursday and JB HiFi on Friday.
AAP
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