New research by a Roy Morgan web survey taken in late November shows over a third of Australians, 37 per cent, think 2022 will be a year of “economic difficulty”, although this is down 11 per cent points on a year ago when nearly half of Australians, 48 per cnet, predicted “economic difficulty” for 2021.
For the second straight year there are only 19 per cent of Australians who think next year will be a year of “economic prosperity”. Nearly half of all Australians think next year will either “remain the same” (37 per cent) or don’t know seven per cent how the economy will perform.
Analysing by State shows that a plurality of people in the largest States think next year will be a year of “economic difficulty” led by Queensland (43 per cent), Victoria (38 per cent) and New South Wales (35 per cent). However, in Western Australia (46 per cent) and South Australia (45 per cent), a clear plurality of people expect in economic terms next year will ‘Remain the same’.
Australians are not as positive about next year’s economic prospects as they are about whether 2022 in a more general sense will be ‘better’ or ‘worse’ than 2021. As we revealed yesterday, despite being down on a year ago, a plurality of 37 per cent of Australians say 2022 will be “better” than 2021 compared to only 23 per cent that say it will be “worse:.
This special Roy Morgan web survey was conducted in late November with a cross-section of 1,184 Australians aged 18+.
Analysis by Age & Gender – Will next year be a Year of ‘Economic Prosperity’, ‘Economic Difficulty’ or ‘Remain the same’
Michele Levine, chief executive officer Roy Morgan, said over a third of Australians (37 per cent) expect 2022 will be a year of “economic difficulty” and only 19 per cent think 2022 will be a year of “economic prosperity” – but another 37 per cent are ‘hedging’ their bets and expecting more of the same.
Levine commented: “Although, as revealed yesterday, there are more Australians (37%) who say 2022 will be ‘better’ than 2021 compared to only 23 per cent who say it will be ‘worse’ – this doesn’t mean Australians are expecting 2022 will be a great year – just comparatively better than 2021.
“This belief is borne out when one considers how people regard the performance of the Australian economy in 2022. Over a third (37 per cent) say 2022 will be a year of ‘Economic difficulty’ nearly twice as many as the 19 per cent who expect a year of ‘Economic prosperity’. Another 37 per cent say in economic conditions in 2022 will ‘Remain the same’.
“The divergent viewpoints show that even as Australians look forward with a degree of optimism there is considerable economic uncertainty attached to what may happen next year. The biggest factors looming over next year are the Federal Election – due by May 2022 at the latest – and a range of closely related economic factors including inflation, interest rates and unemployment.
“Roy Morgan’s monthly Inflation Expectations index shows the indicator at a seven year high of 4.9 per cent in November 2021 – and up a record 1.5 per cent points from a year ago. The sharp rises in Inflation Expectations show the issue is increasingly front of mind for many Australians and, although the RBA has said it has no plans to raise interest rates in 2022, there is a concern that if the inflation rate increases significantly next year, they will be forced to act earlier than expected.
“The RBA has stated that it will only consider raising interest rates when wages growth in the economy is clearly above two per cent and when the ABS CPI figure is sustainably between 2-3 per cent. In the most recent September quarter the ABS CPI annual rate of inflation dropped by 0.8 per cent points from 3.8 per cent in the year to June 2021 down to three per cent in the year to September 2021.
“The sharp changes in inflation during this year are closely related to the COVID-19 pandemic and the many lockdowns different parts of Australia has dealt over the last 18 months. Although we are all hopeful, we have seen the last city-wide or state-wide lockdown, the emergence of the Omicron variant in recent weeks has added new economic uncertainty as we head into 2022.
“The lockdowns have also had a big impact on Australian employment levels but on each occasion when a lockdown has ended the economy has bounced back quickly. The latest Roy Morgan employment estimate for November show 13.2 million Australians were employed – up from 12.9 million employed in February 2020 pre-pandemic. November was the first month after the end of the recent lockdowns of over half of Australia’s population in NSW, Victoria, and the ACT.
“Considering all of the above uncertainties surrounding inflation, interest rates, unemployment, the potential for new variants of COVID-19 to emerge, and the added uncertainty surrounding an imminent Federal Election, it’s probably no surprise that Australians are more likely to expect ‘Economic difficulty’ next year rather than ‘Economic prosperity’.”
