Roy Morgan Update May 7, 2024: ALP Support unchanged, 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.

The key weekly indicators had mixed results this week before today’s Reserve Bank meeting and in the lead-up to next week’s pre-election Federal Budget.

The Albanese Labor Government retained the lead for the third week in a row - with support unchanged on 52% ahead of the Coalition on 48% on a two-party preferred basis.

If an election were held now the ALP would be re-elected with a slim majority - as they have now, the latest Roy Morgan Poll shows.

Both key confidence indicators (Government Confidence and Consumer Confidence) continue to languish and both were down this week.

A majority of Australians, 56.5%, say the country is heading in the wrong direction – less than a third, only 30%, say the country is heading in the right direction – As a result, Roy Morgan Government Confidence is well below the neutral level of 100.

Government Confidence is 73.5 – down 4 points in a week. This is the lowest rating so far this year in the week before the Reserve Bank meets and before next week’s Federal Budget.

In terms of consumers, only 9% of Australians expect ‘good times’ for the economy over the next year and only 10% (down 2% points) expect ‘good times’ for the economy over the next five years – the lowest figure for this indicator so far this year.

As a result, there was a small drop in ANZ-Roy Morgan Consumer Confidence, down 0.6pts to 80.5 this week.

Consumer Confidence has now spent a record 66 weeks below the level of 85. Looking back over the last few months, Consumer Confidence has now moved in a narrow band of 80-85 over the last 22 weeks (over five months) since early December.

The Consumer Confidence interviewing took place before the Reserve Bank board meeting today and with next week’s Federal Budget front of mind for many people.

In better news, Inflation Expectations were down 0.3% to 5.0% this week. Australians now expect annual Inflation to be 5.0% over the next two years.

Like Consumer Confidence, Inflation Expectations have stayed within a narrowband of 4.8% to 5.3% since early December.

The fall in Inflation Expectations reverses last week’s increase and comes after average petrol prices fell over 5 cents a litre last week to drop from a near record high to $2.07 per litre.

Despite the fall, average retail petrol prices have now spent a record 43 weeks (more than ten months and since mid-July 2023) above $1.80 per litre.

More recently, since late January, average retail petrol prices have averaged $2 per litre.

So how are businesses feeling? Roy Morgan’s Business Confidence for April shows the index up slightly by 1.3 points to 99.3.

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.

There were mixed results in April with views about the Australian economy’s performance over the next year improving, but the longer-term view deteriorating.

An increased majority of businesses, 52.1% (up 8.2% points) expect ‘good times’ for the economy over the next 12 months (the best result for this indicator for exactly two years since April 2022).

In contrast, an increasing majority of 60.5% (up 6.4% points) expect ‘bad times’ over the next five years.

This disconnect between shorter and longer-term views is unusual.

One explanation is that in the shorter term the prospect of significant income tax cuts starting in July are set to provide an economic boost while looking longer term there is a general level of uncertainty about where the Australian economy is heading and what policies the Albanese Government will take to secure growth and improvements in productivity over the longer-term.

Over the last two months of March and April seven industries had Business Confidence in positive territory above the neutral level of 100.

The most confident industries have been the same three so far this year and are Finance & Insurance with a Business Confidence of 121.8, Education & Training on 119.1 and Accommodation & Food Services on 114.5 and has dropped down a few points since Summer ended.

Other confident industries include Administration & Support Services on 110.4, Professional, Scientific & Technical Services on 109.8 and Property & Business Services on 104.0.

At the other end of the scale Transport, Postal & Warehousing again has clearly the lowest Business Confidence at only 71.2.

Other industries with below average Business Confidence include Public Administration & Defence, Electricity, gas & water, Wholesale and Agriculture.