CCIWA Chief Economist
Aaron Morey
Consumer sentiment in WA is bucking the national trend, improving despite rising financial strain on households.
The latest Chamber of Commerce and Industry WA (CCIWA) Consumer Confidence Survey shows economic expectations brightening, with two in five respondents (39%) anticipating improved conditions over the coming 12 months, up nine percentage points.
Though respondents widely cite inflation (75%), interest rates (68%) and global events (52%) as impeding their confidence, the depth of concern has moderated in the latest survey.
Meanwhile, confidence in WA’s jobs market is growing, with 44% reporting it supported their confidence, up 14 points. The State Government also rated more highly following former Premier Mark McGowan’s final Budget, cited by 45% of respondents as supporting their confidence.
There are clearly, however, some challenges ahead. 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. One in every 10 Western Australians (11%) said they would have no way to pay such an expense.
More than half of respondents (52%) have depleted their savings to manage rising costs, with a median ‘buffer’ of just $5,000 in the bank – down $1,000 since 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 have 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. 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.
