Despite the increasing financial strain on households, consumer sentiment in WA is on the rise, defying the prevailing national trend.
The latest Consumer Confidence Survey by the Chamber of Commerce and Industry WA (CCIWA) reveals a brightening economic outlook during the three months to June, with a significant increase of respondents anticipating improved conditions over the next 12 months.
The continued strength of the labour market is the primary factor supporting consumer confidence.
Both shorter and longer-term confidence have jumped this quarter and are at their highest since June 2022.
According to the survey, two in five respondents (39%) expressed optimism about the future, marking a notable nine-percentage-point increase compared to previous data. While respondents acknowledged several factors hindering their confidence such as inflation (75%), interest rates (68%) and global events (52%), the level of concern has moderated in the latest survey.
Confidence in WA’s job market is growing, with 44% of respondents stating it contributes to their overall confidence, reflecting a significant 14-point increase. Additionally, the State Government received higher ratings, particularly following the release of former Premier Mark McGowan’s final budget surplus, which was cited by 45% of consumers as a supportive factor for their confidence.
Challenges ahead
However, there are clearly some challenges ahead, says Aaron Morey, CCIWA Chief Economist.
“In the event of an unexpected bill of $700, two in every five (38%) respondents would be forced to turn to credit or a loan from family,” he says.
“One in every 10 Western Australians (11%) said they would have no way to pay such an expense.”
More than half of respondents (52%) say they have depleted their savings to manage rising costs, with a median ‘buffer’ of just $5,000 in the bank – down $1,000 six months ago.
Nearly one in three (29%) WA mortgage-holders have drawn down more than 20% on their savings.
Over the past year, respondents estimated their mortgage repayments ramped up by 23%, while rents increased by an average of 16%.
Looking to the next 12 months, WA households are set to reduce their spending on eating out (54%), reduce their energy and water use (42%), fuel (30%) and home repairs or renovations (26%).
“These results show consumer sentiment withstanding tough financial strains, likely reflecting an expectation that our difficulties have reached their peak,” says Morey.
“However, with savings being whittled away and many fixed-rate mortgages due to expire, there are undoubtedly challenges ahead.
“CCIWA looks forward to working with the incoming Cook Government to reinforce and strengthen WA’s economy.
For the latest economic reports, see CCIWA’s Economic Insight page.
