ABCC_Blog_Desk
timon-studler-ABGaVhJxwDQ-unsplash
Tuesday 15 November 2022

C|T Group: A Bilateral Economic Overview

At the end of 2022, the global business environment stands in stark contrast to that of just 18 months ago. The Covid-19 pandemic appears to be receding, inflation is rampant in many advanced economies, and land war has returned to Europe.

Governments and businesses alike must contend with these new realities, and impacts they have on voters, customers, and the strategic imperatives for business.

The C|T Group (C|T) conducts an annual omnibus survey to track the overarching concerns of the general population in Australia, the United Kingdom, the United States, India, the United Arab Emirates and Brazil. These surveys, and our bespoke research, are used to advise our clients across the world on how best to pursue their business objectives in the contemporary environment.

This year’s results in the UK and Australia bear some especially striking similarities. The top three issues are the same: reducing the cost of everyday goods and utilities, improving access to healthcare, and reducing hospital wait times, and rebuilding the national economy after the Covid-19 pandemic. While overt concerns about stopping the spread of COVID-19 have reduced substantially in both markets, these may also be driving the increased importance on access to healthcare and reducing hospital wait times, possibly as people focus on the ability of the hospital system to absorb both seasonal flu cases and lingering COVID cases.

Inflation is the major talking point in global business at the moment and the survey offered some insights on how people perceive its sources. In the UK, 77% of respondents attributed price increases on everyday goods to the rising prices of fuel and other essential commodities like cooking oil, while 72% attribute these increases to the war in Ukraine. In Australia, those figures are 71% and 63%, respectively. Australians are far more likely than Brits to attribute rising prices to the lack of availability of products and services due to issues arising from Covid-19, with 67% of Australians and 54% of Brits considering this likely.

Importantly, 54% of Brits and 52% of Australians attribute price increases to businesses increasing their prices to maintain their profit margins. This indicates a trust deficit between businesses and their customers and a need for businesses to better communicate the reasons for their price increases. Generally speaking, businesses in the UK need to contend with a local customer base that is largely pessimistic about the economy, significantly more so than the other markets tested. 66% of UK respondents believed the economy would get “much worse” or “a little worse” in the coming 12 months. These perceptions are correlated with age, with respondents aged 55+ being the most pessimistic and 18-34 year olds being the lease pessimistic, despite over half still having a negative outlook (56%). Unsurprisingly, this has impacted Brits’ view of their personal finances, with “financial survival” identified as the dominant financial goal.

While Australians are less pessimistic overall, with 46% believing the economy will get “much worse” or “a little worse” over the next 12 months, many Australians are struggling to keep up with the rising cost of living through pay rises alone. Those already on higher incomes are far more likely to have received a pay rise than those with lower incomes. Similarly, those with a university education are more likely to have received a pay rise.

These price increases and the war in Europe have had a profound impact on how Brit and Australians view the energy sector. UK respondents are far more positive about using nuclear energy to generate power than they were in January 2021, likely reflecting concerns about the security of foreign supply and pricing. That said, support levels for renewables and gas power remain roughly as they were in January 2021 and high compared to other markets.

In Australia, there has also been a fairly dramatic change in how respondents perceive energy sources since the start of 2020. While renewables (solar, hydroelectric and wind power) still enjoy the highest level of support, that support has softened considerably over those two years. Conversely, support for coal has increased from net -5 to zero over that same period. There is also strong support for energy nationalism in Australia, with high agreement that the Federal Government should legislate that a minimum amount of resources produced should stay in Australia (66% of respondents either strongly agree or somewhat agree with this statement). In the UK, 44% of respondents believe the UK should keep all of the fuel and energy it produces, rather than sending it overseas. This growing trend should put resource companies heavily dependent on export revenues on notice and be factored in as they develop their strategic government engagement and communications campaigns.

Facebook Twitter
Copyright © 2021-2024
All Rights Reserved