While many retailers are bemoaning Greater Sydney's extended lockdown, some are calling for tougher restrictions to help control the outbreak more quickly as the economic damage quickly mounts.

New South Wales, being the largest state economy, accounts for one-third of Australia's output.

If the lockdown drags on for another month, it could lead to a $7 billion hit to the Australian economy, according to a prominent economist.

"My estimate is that it’s costing the NSW economy, and therefore by definition the national economy, about $1 billion a week," AMP Capital's chief economist Shane Oliver said.

He also said the consequences of a prolonged lockdown is that it will take more time for Australia's economy to recover, and "slow progress in reducing unemployment".

That is particularly since the hardest-hit workers and businesses can no longer rely on the JobKeeper safety net.

Just over a fortnight ago, NSW Agricultural Minister Adam Marshall tested positive for COVID-19 and Health Minister Brad Hazzard was forced to isolate after he was identified as a close contact.

On that day, NSW reported 11 new COVID-19 infections, and Mr Hazzard said he "doesn’t believe” Sydney will be placed in a lockdown.

Oliver says NSW 'failed to learn'

Since then, the daily number of infections has surged above 110, and it is expected to keep climbing for another fortnight.

"There is a strong case to be made that if the lockdown had started two weeks ago, travel was restricted to a greater degree within the city, and non-essential retail was closed down, then we’d probably be in a far better state right now," Dr Oliver said.

In other words, the Sydney-based economist said it was "unfortunate" the NSW government had "failed to learn" the lessons from Melbourne's extended lockdown, which lasted 112 days.

For him, the silver lining is he does not expect Sydney's lockdown to drag on for as long as that. That would mean NSW's economy "and by definition the national economy" will not suffer a $15 billion hit like Victoria did last year.

Dr Oliver expects the lockdown to have a significant impact on the pace of the country's economic recovery in 2021.

He believes Australia's GDP growth may slow down to 4 per cent this year (a downgrade from his previous forecast of 4.5 per cent).

'Essential' to buy a handbag?

Sydneysiders are only allowed to leave home to purchase "essential goods", leaving many perplexed why clothing, electronics, toy, jewellery and luxury stores have been allowed to remain open.

The head of womenswear retailer Cue and Veronika Maine criticised the state for imposing what he said was a "Clayton's lockdown", the "kind of lockdown that you have when you're not having a lockdown".

While many of his competitors continued to trade, Cue Clothing's chief executive Justin Levis made the difficult decision to temporarily shut down his Sydney stores in the interests of public safety.

"I think it's absolutely irresponsible to be trading in areas where the virus is now rampant," he said.

As for whose fault it was that was occurring, he blamed both businesses and consumers.

Mr Levis said his decision to shut down has been "extremely detrimental".

"Our NSW business is approximately 30 per cent of our total turnover," he said.

"Whilst my businesses outside NSW, around Australia and internationally, are still trading, unfortunately it's going to really hurt me because I’m having to shut down my manufacturing base now.

"Even my workers, who are making clothes for people in non-locked-down areas, aren't able to come into work. So the detriment to my business is significant.

"However, I would say I’d rather take the hit in one shorter, harder spike than prolong the agony, which is economically more harmful."

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