More Australians are re-engaging economically and socially, but many still expect the pandemic to have a long-term negative impact on the economy, according to the latest survey by the Melbourne Institute: Applied Economic & Social Research at the University of Melbourne.
The Taking the Pulse of the Nation weekly survey tracks changes in the economic and social wellbeing of Australians living through the effects of the coronavirus (COVID-19) pandemic. The 11th round of the survey was conducted from 15-19 June.
The latest survey found that the proportion of people limiting activities outside of their house because of concerns about contracting COVID-19 fell to 47 per cent, down from 59 in week eight. This includes activities such as shopping, going to a restaurant or taking public transport.
While people are increasing social and economic interactions outside of the household, the survey shows this does not necessarily translate into an expectation of a shorter duration of the pandemic’s negative effects. Eighty-four per cent of respondents expect the effects on the Australian economy to last longer than six months, rising slightly from 82 per cent in week 10.
More Australians also expect the impact of the pandemic to affect them personally for longer with 57 per cent of respondents expecting their home activities, employment situation and social interactions to be impacted for more than six months. This is up from 50 per cent in week nine, while the proportion expecting to be personally affected for less than six months fell from around 43 per cent to 37 per cent.
The survey shows Australians also expect the economy will take longer to recover from the fallout of COVID-19 than they will themselves. Data aggregated over weeks seven, nine and 11 of the survey show that almost half (49.7 per cent) of respondents believe the economy will still be affected by COVID-19 beyond one year, whereas only 21 per cent believe that they will be personally affected as long.
Melbourne Institute researcher Professor John P. de New examines the differences between perceptions for the Australian economy and one’s own circumstances in a Research Insight paper published this week.
Professor de New writes that the apparent systematic disconnect between expectation for oneself and expectations for a larger group, such as the economy in general, is known as the ‘better-than-average effect’ or ‘optimistic bias’.
“Our research shows that females and those in employment have higher propensities to form their expectations with more ‘optimism’,” Professor de New said. “This better-than-average effect could be beneficial in kick-starting the economy. Sixty-six per cent of the respondents are in employment and likely to drive consumer spending, having the economic resources to do so.”
The latest survey also found that the proportion of people experiencing mental distress has increased for the third consecutive week, up from 15 per cent in week nine to 18 per cent in week 11.
The financial conditions of Australians were more volatile. Over the past three weeks, the proportion of people reporting financial stress fell by eight percentage points, then increased by 10 percentage points and in the most recent survey it fell again by four percentage points.
Melbourne Institute researcher Professor Guay Lim said the swings in financial stress may reflect the uncertainty in the economy and the uneven incidence of job losses across the sectors.
“Figures from the Australian Bureau of Statistics show that the underemployment rate is highest for the younger age group (15-24 years), and our own research shows that this group is also most likely to experience mental distress and financial stress,” Professor Lim said.
“Younger Australians tend to be more vulnerable to negative economic shocks as they have little or no labour market experience, and tend to move between training and working, usually on a casual or temporary basis. This cohort forms a relatively large share of employees in industries particularly negatively impacted by the coronavirus, such as the hospitality sector.”
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*The weekly survey by the Melbourne Institute: Applied Economic & Social Research at the University of Melbourne contains responses from 1,200 people aged 18 years and over, with the sample stratified by gender, age and location to represent the Australian population.