Roy Morgan Update July 9, 2024: ALP Support drops, Consumer & Business Confidence

In this week's update, we present the latest data on Primary Voting Intention, Consumer & Business Confidence.

Welcome to the Roy Morgan Weekly Update.

I’m Julian McCrann, the Roy Morgan Poll Manager, stepping in for Roy Morgan CEO Michele Levine who is unavailable.

A Coalition Government, with a slim majority, would now win a Federal Election with the two-party preferred vote: Coalition on 52% ahead of the ALP on 48%, the latest Roy Morgan survey finds.

The Coalition surged after ALP disunity on the conflict between Israel and Hamas led to Senator Fatima Payman to quit the Labor Party last week.

You’ll recall, Senator Payman crossed the floor a few days before quitting the party when the Greens brought a motion to the floor calling for recognition of Palestinian statehood.

And as Michele Levine says in her commentary “In politics, disunity is death.”

The changes in the two-party preferred results were driven by real changes in the primary vote. Primary support for the Coalition increased 3% to 39.5% this week while the ALP dropped 3% to 28.5%.

Support for the Greens increased 0.5% to 13.5%.

One Nation increased 0.5% to 5%, support for Other Parties dropped 1% to 4.5% and support for Independents was unchanged at 9%.

Roy Morgan Government Confidence dropped 5.5 points to 73 – now over 25 points below the neutral level of 100.

A large majority of 57% of Australians say the country is going in the wrong direction, only 30%, say the country is heading in the right direction.

ANZ-Roy Morgan Consumer Confidence dropped 2.3 points to 79.0 – more than 20 points below the neutral level of 100.

Looking longer-term, Consumer Confidence has now spent a record 75 weeks below the level of 85 – almost 18 months.

Consumer Confidence fell despite income tax cuts that began on July 1 for working Australians but did follow the higher-than-expected official ABS inflation figure of 4% for the year to May which led to much speculation that the Reserve Bank may be forced to raise interest rates again in the next few months.

The big driver of the weekly fall was the slump in ‘buying intentions’ after the Mid-Year, or, ‘End of Financial Year’ Sales finished up at the end of June.

Now a majority of 50.9% of Australians, up 4.8% points in a week, say now is a ‘bad time to buy’ major household items and only 20.6% of Australians, down 4.2% points, say now is a ‘good time to buy’ major household items.

This is the biggest weekly fall in the buying intentions indicator for nearly 18 months since February 2023 when the Reserve Bank raised interest rates for the first time that year.

The ‘buying intentions’ indicator usually moves lower after the end of big retail sales events such as the Black Friday/ Cyber Monday sales or the Mid-Year sales.

This week Inflation Expectations dropped 0.3% to 4.9%.

The ANZ-Roy Morgan Inflation Expectations indicator now shows Australians expect annual inflation to be 4.9% per annum over the next two years.

Despite the fall, Inflation Expectations have been remarkably stable over the last seven months and have stayed within a narrow band of 4.8% to 5.3% for 31 weeks since early December.

So how are businesses faring and feeling?

Roy Morgan measures Business Confidence monthly and in June Roy Morgan’s Business Confidence was down 5.5 points to 91.5 to its lowest level so far this year.

The Federal Budget delivered in early May has clearly failed to provide a boost to Business Confidence with the index falling in both May and June.

This result is not that surprising, businesses have rarely had a positive response to an ALP Federal Budget. Looking back, Business Confidence has dropped in all six out of six years in June following an ALP Federal Budget.

Roy Morgan interviews around 1,500 businesses each month to gauge their views on their company’s prospects as well as their assessment of the broader Australian economy.

Business views about the Australian economy’s prospects over the next year and the next five years declined in June and drove the overall index down.

Confidence about the performance of the economy over the next year fell significantly with 45.5% (down 6.5% points), expecting ‘good times’ while 51.6% (up 6.6% points) expect ‘bad times’;

Looking longer-term a record high 63.8% (up 8.6% points) of businesses say they expect ‘bad times’ for the Australian economy over the next five years and a record low of only 26% (down 6.4% points) expect ‘good times’ for the economy over the next five years.