But the prime minister believes the economy will bounce back smartly, just as it did when virus lockdowns were removed in the past.
Treasurer Josh Frydenberg - from his COVID-19 sick bed - and Treasury are monitoring developments, but Mr Morrison says it is too early to provide an exact assessment Omicron's impact.
"As the case numbers continue to rise, the volume of cases will of course have an inevitable impact on the workforce," the prime minister told reporters in Canberra on Monday.
"This is an incredibly tough time on business. There aren't lockdowns but there are many people obviously impacted by being close contacts or people being wary, or those indeed who have COVID themselves."
He said it was having a "predictable and understandable" impact on consumer spending.
But Opposition Leader Anthony Albanese warned if the government doesn't get the health outcomes right, the adverse impact on the economy will be stronger.
"We are seeing that around the country, we're seeing that with workers unable to attend work, with shortages on our supermarket shelves," Mr Albanese told reporters in Townsville.
"And it's extraordinary that in the third year now of this pandemic, the prime minister's rhetoric is still the same."
Official retail spending figures for November are due on Tuesday, which economists expect to show another strong outcome as a result of NSW, Victoria and the ACT all emerging from extensive lockdowns battling the Delta variant.
However, an analysis by ANZ last week showed spending in the week to January 5 has returned to the low levels seen during the Delta lockdowns as consumers showed caution about being in public places as the Omicron strain emerged.
However, Assistant Treasurer Michael Sukkar is confident the Australian economy can overcome the Omicron challenge with households having the security of huge savings.
Mr Sukkar says new data shows households have built up $48 billion in offset mortgage accounts and more than $170 billion in other savings accounts during the pandemic.
"So that's $220 billion of economic firepower that's there - it provides a great foundation to continue to support our economic recovery," Mr Sukkar told Sky News.
Meanwhile, the Australian Bureau of Statistics said building approvals bounced back by 3.6 per cent in November after a sharp 13.6 per cent drop in October.
The rising number of approvals was driven by the 'private sector dwellings excluding houses' component, which increased by 9.7 per cent to 5315 approvals.
Private sector house approvals rose 1.4 per cent to 10,892, following a 3.5 per cent rise in October.
"The series has been at historically elevated levels over the past year, largely driven by government stimulus and record low interest rates," ABS director of construction statistics Daniel Rossi said.
"While private house approvals are no longer at record highs, the November result remains 25.8 per cent higher than the pre-pandemic level in November 2019, indicating ongoing strength in the detached housing market."
Housing Industry Association chief economist Tim Reardon believes the boom in detached home building is set to be sustained well into 2023.
14°C