South Australians have settled back to the confidence levels of pre-COVID times after an improvement in May when local restrictions were reduced, according to the June Square Holes Mind and Mood survey of 400 South Australian adults.
Square Holes founder Jason Dunstone said, however, this rebound was not evenly spread amongst age groups or geography.
“Regional South Australians are more confident about the next 12 months, as are younger South Australians,” Dunstone said.
Dunstone noted that confidence is highest amongst 35-49 year olds, 50 per cent of who expressed confidence in next 12 months, and lowest amongst South Australians aged 65+ (35%).
“When asked how confident they feel compared with one month ago, 33 per cent indicated they feel more confident,” Dunstone said.
This level was significantly higher for 18-34 year olds (44%) and lowest for 65+ year olds (23%), he said.
Similarly, South Australians have almost flatlined when asked about financial security compared with 12 months ago.
“It is performing above April measures, although the percentages indicate many South Australians are continuing to feel nervous,” Dunstone said.
But South Australians seem to understand that things could be worse and others are struggling more.
Dunstone said around one in five South Australians believe their financial security is better than 12 months ago, but smaller proportions believe the financial security of others is better than 12 months ago.
“There is a declining sense of financial security compared with 12 months ago as age increases, including personal security and that of others in SA, interstate and overseas,” Dunstone said.
The survey also found an age skew towards younger age groups feeling stronger personal financial security.
Dunstone puts this down to the optimism bias of these younger people.
“This is the tendency to feel, likely unrealistically, optimistic about one’s own situation, yet less optimistic towards others,” he said.
Regional South Australians have a much stronger sense of financial security than those living in metropolitan Adelaide compared with 12 months ago.
“There is an appreciation that financial security locally and worldwide has declined over the past 12 months, particularly compared with benchmark findings from an identical Square Holes survey of South Australians in 2014,” Dunstone said.
“While there is a decline in South Australians saying their own financial security is worse compared with the benchmark in 2014, the proportion believing financial security is worse for other South Australians, and people living interstate and overseas has grown notably
“This is especially true for ‘Australians not living in South Australia’, which increased from 20 per cent of respondents indicating ‘worse’ in 2014 to 47 per cent in 2020.”
The Square Holes survey found that the perception of financial security looking forward 12 months is consistent with May 2020.
“The proportion of South Australians believing their financial security will be ‘worse’ has remained stable following deterioration in March and April in the epicentre of COVID-19 uncertainty,” Dunstone said.
Dunstone said that younger South Australians again feel much more buoyant about the next 12 months than other South Australians, while those over 50 are less confident about the financial security of people living overseas than other age groups.
“Irrespective of age, a larger proportion believe financial security will be the same or better in 12 months than worse,” Dunstone said.
While younger South Australians are more optimistic about the financial security of themselves and others, for older age groups there is a larger proportion believing that financial security will worsen than those sensing it will remain the same or better.
“Only one in twenty South Australians aged above 65 believe their financial security will be better in 12 months, compared with around one in three 18 to 49 year olds,” Dunstone said.
“There is a greater sense of financial optimism in younger South Australians, for themselves and others.”
When compared against identical data collected in 2014, the percentage saying that financial security will be better for themselves is slightly below the benchmark, while significantly above the 2014 levels for wider South Australia, interstate and overseas.
Dunstone said the proportion of South Australians anticipating financial security to get worse is statistically identical to 2014, although indicates an anticipation of declining financial security overseas.
“Financial security personally and for others, be it realistic or even a dose of optimism bias, tends to drive spending,” Dunstone said.
“In times of low confidence and financial security for themselves and the broader economy, spending tends to contract, as the general population prepares for an uncertain future.
“This likely impacts discretionary and impulse spending, yet particularly planned expenditure such as travel, cars, real estate, renovations and other larger items critical to stimulate economic vibrancy and maintain employment.”
Dunstone predicts that as South Australians begin to feel less anxious about health fears associated with COVID-19, their economic fears will steadily grow.
“From the above data, younger South Australians have a stronger financial security and confidence, and likely appetite for spending than their older neighbours,” Dunstone said.
“This is worth considering in the marketing, product development and other strategies required for local businesses to survive and prosper as worldwide economic instability continues.”
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