The number of new COVID-19 infections in NSW has topped 5000 for the second day in a row, swamping contact tracers, overwhelming testing sites and forcing the reintroduction of some restrictions.
Some 5612 people were diagnosed with the virus in the 24 hours to 8pm on Thursday from more than 164,000 tests.
While the number of cases dropped by 103 from the record high of the day before, the number of tests increased by more than 3600.
One death was also reported.
The number of people in hospital has climbed to 382, up 35, with 53 in intensive care, an increase of eight.
The majority are among the 6.5 per cent of the population that remains unvaccinated, NSW Health says.
The spike has forced the government to reintroduce some restrictions that were only wound back less than two weeks ago.
Almost 30,000 people have been diagnosed with the virus in NSW in the nine days since.
Masks are again required in indoor settings from Friday, with hospitality venues to return to the one person per two-square metre rule and QR codes to be compulsory again from Monday.
The restrictions will last at least a month.
The announcement on Thursday came after the government spent two weeks avoiding mask and QR code mandates by insisting people needed to take "personal responsibility" for their actions.
Deputy premier Paul Toole on Friday defended the approach, saying the government had been striking the right balance.
"A lot of people were taking personal responsibility," he told Nine's Today Show.
"They were wearing masks already but what we have done is made sure that... anybody that is in an indoor setting is going to be wearing a mask."
It's by far the state's most widespread outbreak, spurred on by the highly transmissible Omicron variant, and has forced NSW to scale back contact tracing efforts.
Just over one in two - 54 per cent - of people who test positive were fully interviewed by health bureaucrats within a day last week.
The week prior, that figure stood at 94 per cent.
To help NSW Health direct resources to the most vulnerable or high risk cases, people who test positive will get a text message asking them to fill out an online questionnaire.
About four in five people fill it out, said NSW Chief Health Officer Kerry Chant on Thursday.
Those who are only contacted by text are asked to let their contacts know about their diagnosis, a task which used to be performed by bureaucrats.
Only those who work at or have visited a high-risk setting like a disability group home, Aboriginal community or jail will get a phone call from NSW Health.
The health care system is also beginning to struggle under the weight of the outbreak.
"About a week ago we had around 300 health professionals that were not able to work because they were isolating, but now we have over 1500 health workers," Mr Toole said.
Despite the escalating caseload and the strain on the health system, lockdowns will be a last resort and New Years Eve celebrations will proceed as planned.
© AAP 2021