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Price expectations higher in Country Areas than Capital Cities

Source: Roy Morgan Single Source: Interviews an average of 4,000 Australians per month aged 14+ (Apr. 2010 – Oct. 2019).

Surveyed in October, Australians as a whole expect prices to increase by 4.1% annually over the next two years. This is up very slightly (0.1%) on how they were feeling in September, but is down to a greater degree (0.4%) on their expectations a year earlier.

Comparing price expectations around Australia reveals a significant divide between Country Areas with higher price inflation expectations than Australia’s Capital Cities. Australians in Country Areas expect prices to rise by 4.3% annually over the next two years compared to only 4% in the Capital Cities.

Price expectations in Country Victoria (4.8%) are higher than anywhere else in Australia and significantly higher than in the Victorian capital of Melbourne (4.1%). There is a similar dynamic at play in Country NSW (4.2%) compared to NSW Capital Sydney (3.8%) although the gap is narrower.

The two exceptions to this rule are Queensland in which price expectations are at 4.4% throughout the State and South Australia. Price expectations in Adelaide (3.9%) are slightly higher than in Country South Australia (3.8%) although both are below the national average.

The Roy Morgan Inflation Expectations index measures what Australians believe the future trajectory of prices will be over the next two years. Every Australian brings a unique perspective to the movement in prices and which prices are important to them in particular – whether that be food and drink prices at the supermarket, the petrol price at the pump, prices for clothing and footwear, the cost of going to the footy, or prices for financial products, education, housing or public transport,” says Roy Morgan CEO Michele Levine.

“In October price expectations tend to be higher in Country Areas (4.3%) than in the Capital Cities (4%) with this gap most pronounced in Victoria (4.8% cf. 4.1%), NSW (4.3% cf. 3.8%) and WA (4.1% cf. 3.6%). It'll be important to see whether the RBA’s interest rate cuts in 2019 provide a boost to price expectations throughout Australia or whether that increase is more pronounced in specific geographic regions,
’ said Ms. Levine.

Inflation Expectations by Capital City & Country Areas: October 2019


Source: Roy Morgan Single Source: October 2019, n=5,051. Base: Australians 14+.

Inflation Expectations Index long-term trend – Expected Annual Inflation in next 2 years


Source: Roy Morgan Single Source: Interviews an average of 4,000 Australians per month aged 14+ (Apr. 2010 – Oct. 2019).

Price expectations significantly higher for ALP supporters than L-NP or Greens supporters

Analysing Inflation Expectations by political affiliation shows that ALP supporters (4.2%) have higher expectations than either L-NP supporters (3.7%) or Greens supporters (3.5%). However, those supporting Independents and minor parties have the highest expectations, at 4.4%.

October Inflation Expectations are based on personal interviews with a nationally representative sample of 5,051 Australians aged 14+.

To learn more about the trends for Inflation Expectations as well as Consumer Confidence for different segments and demographics throughout the Australian community purchase the Roy Morgan Consumer Confidence Monthly Report.


Monthly Roy Morgan Inflation Expectations Index (2010 – 2019)

Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Yearly

Average

2010

n/a

n/a

n/a

5.9

5.8

5.5

5.6

5.4

5.5

5.8

5.6

5.8

5.7

2011

6.6

6.4

6.4

6.2

6.1

6.2

6.1

5.8

5.7

5.8

5.5

5.5

6.0

2012

5.4

5.5

5.9

5.9

6.0

6.2

5.9

5.9

5.8

5.7

5.6

5.4

5.8

2013

5.2

5.1

5.3

4.9

5.2

4.9

5.3

5.0

4.8

4.9

4.8

5.0

5.0

2014

5.1

5.2

5.2

5.1

5.1

5.3

5.0

4.8

5.0

4.8

4.9

4.4

5.0

2015

4.4

4.3

4.5

4.5

4.2

4.4

4.4

4.5

4.5

4.2

4.4

4.5

4.5

2016

4.3

4.2

4.2

4.2

4.0

4.0

4.1

3.9

4.1

4.1

3.9

4.2

4.1

2017

4.5

4.4

4.4

4.4

4.3

4.2

4.3

4.5

4.4

4.5

4.5

4.5

4.4

2018

4.5

4.4

4.3

4.5

4.3

4.5

4.3

4.3

4.3

4.5

4.3

4.2

4.4

2019

4.2

4.0

4.0

3.7

4.1 3.8 4.1 3.9 4.0 4.1

4.0

Monthly
Average

4.9

4.8

4.9

4.9

4.9

4.9

4.9

4.8

4.8

4.8

4.9

4.8

4.9

Overall Roy Morgan Inflation Expectations Average: 4.9

The questions used to calculate the Monthly Roy Morgan Inflation Expectations Index.

1) Prices.

“During the next 2 years, do you think that prices in general will go up, or go down, or stay where they are now?”

2a) If stay where they are now.

“Do you mean that prices will go up at the same rate as now or that prices in general will not go up during the next 2 years?

2b) If go up or go down.

“By about what per cent per year do you expect prices to (go up/ go down) on average during the next 2 years?”

3) If respondent says more than 5%.

“Would that be (x%) per year, or is that the total for prices over the next 2 years?”

The Roy Morgan Inflation Expectations Index is a forward looking indicator unlike the Consumer Price Index (CPI) and is based on continuous (weekly) measurement, and monthly reporting. The Roy Morgan Inflation Expectations Index is current and relevant.

Browse our Online Store for an extensive range of reports on Inflation Expectations and Consumer Confidence, Business Confidence, Federal voting intention and many other profiles.

For comments or more information please contact:
Roy Morgan - Enquiries
Office: +61 (03) 9224 5309
askroymorgan@roymorgan.com


About Roy Morgan

Roy Morgan is the largest independent Australian research company, with offices throughout Australia, as well as in Indonesia, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan has over 70 years’ experience in collecting objective, independent information on consumers.

Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size

Percentage Estimate

40%-60%

25% or 75%

10% or 90%

5% or 95%

1,000

±3.0

±2.7

±1.9

±1.3

5,000

±1.4

±1.2

±0.8

±0.6

7,500

±1.1

±1.0

±0.7

±0.5

10,000

±1.0

±0.9

±0.6

±0.4

20,000

±0.7

±0.6

±0.4

±0.3

50,000

±0.4

±0.4

±0.3

±0.2