It's been described by an expert as a lockdown in NSW without public health orders.
A woman wearing a mask walks past an image of the Sydney Harbour Bridge. Photo: AFP
Although the country's most populous state has few Covid-19 restrictions in place, businesses around NSW have been forced to close due to virus-induced staff absences.
Spending data analysed by ANZ last week indicated economic activity plummeting to levels lower than any other time during the pandemic.
"We're now facing economic situations that are worse than if we'd had an actual lockdown," said economist Jim Stanford, director of the Centre for Future Work.
The Centre for Future Work is part of the Australia Institute, an independent think-tank funded by donations.
With cases expected to peak in mid-January, analysts from Standford's team have predicted up to a third of workers in NSW could be in isolation in the weeks ahead.
This is how the Omicron outbreak is affecting industries across the state:
NSW's 'world class' health system under pressure
At the centre of the Covid-19 crisis is NSW's health system.
Staff have complained of burnout amid surging Covid hospitalisations.
There are almost 2,200 people with the virus in hospital, including 170 in ICU.
NSW Premier Dominic Perrottet yesterday stood by his assessment of the state's health system as being "the best in the world" and in a "very strong position" to deal with the crisis.
Over 4000 health workers have been furloughed due to Covid or isolation requirements, leading to critical staff shortages across Sydney's largest hospitals.
The state government has attempted to rectify this by altering isolation rules for asymptomatic health workers who are close contacts.
It's also shifting some patients to beds at private hospitals.
NSW Ambulance said it had been dealing with "unprecedented demand", with a record 5120 triple-zero calls made on New Year's Day.
Delivery issues have also impacted the rollout of vaccination programs, while elective surgeries have been paused until mid-February.
The NSW branch of the Australian Medical Association (AMA) president Danielle McMullen called for the Premier to give "a comprehensive acknowledgement" of the crisis the system is facing.
"We are hearing more frustration from members that the rising Covid-19 cases has meant a whole lot of logistics and delivery delays," Dr McMullen said.
"Some clinics may not know when they can reschedule because we're also short-staffed, our doctors, nurses and receptionists are also catching Covid and are off home sick."
NSW Premier Dominic Perrottet Photo: 2021 Getty Images
Education and 'non-negotiable' return to schools
Perrottet has dug-in on a return-to-school date of 28 January.
This is in contrast to his Queensland counterpart Anastasia Palaszczuk, who delayed a return to classrooms by two weeks in her state.
"It's a non-negotiable that kids go back on day one, term one in a safe environment for teachers, parents and students," Perrottet said.
The NSW Premier said the government's purchase of 50 million rapid antigen tests would be a "core part" of getting kids back into classrooms.
"There will be challenges as we move through the return-to-school program but ultimately we can't let perfection be the enemy of good. We need kids back in class."
With less than three weeks until the start of term one, teachers also raised concerns about reports of vaccine doses not arriving at clinics which could impact the rollout of children's jabs.
From yesterday, children aged between five and 11 have been eligible to receive Covid-19 vaccines.
President of the NSW Teachers' Federation Angelo Gavrielatos said about 40 schools a day were being impacted by Covid-19 at the end of last term, when cases were about 5 percent of what they were this week.
He's worried schools could create another pressure point for the state's health infrastructure.
He claimed "massive absentee rates will effectively deem schools non-operational".
"That's what the data is telling us from overseas from the UK and the US, where schools are being shut-down because of absentee rates."
The NSW Government said it was in the process of finalising its Covid blueprint for a safe return to classrooms, pending a discussion at National Cabinet.
Public transport services reduced
Timetables for trains, buses and ferries were slashed in recent weeks with close to 1,000 transport staff in isolation.
Public transport services across NSW on Monday began running on a weekend timetable and will continue to do so for the foreseeable future.
Transport for NSW chief operating officer Howard Collins said patronage across the network was down 70 percent compared to pre-pandemic levels.
"It's about maintaining the continuity of those services and it's dealing with the fact that [with] the impact of Covid-19, like any other business, we're starting to see hundreds of staff off or isolated and also there are less people travelling," he said.
A health worker takes a swab sample at a Covid-19 drive-through testing site in Western Sydney Photo: AFP
Supply chains disrupted, supermarket shelves remain bare
New isolation rules were introduced for workers in the food, logistics and manufacturing sector at the weekend, which allowed asymptomatic close contacts to continue working.
Covid-19 outbreaks at distribution centres across Greater Sydney, as well as abattoirs and meat processing factories, have disrupted supermarket supply chains.
The NSW Premier said he was in contact with stakeholders in other sectors, such as hospitality, about extending similar close contact exemptions.
Perrottet said it was better to have labour shortages than see businesses closing.
"I understand completely where the hospitality sector is coming from: even before the outbreak of Omicron we have had, right across the board, significant staff shortages in a number of industries."
Dr Standford said the government couldn't redefine the virus but it needed to be patient and allow a healthy workforce to rebuild.
"What we're going to need is urgent measures to increase the hours of work for people who can safely and healthily go back to work," the Centre for Future Work director said.
"We've got to support them and reward them and pay them for doing this over the next challenging weeks.
"Once we let the virus rip and have this many people infected, there's no easy solution to it."
- ABC