Despite summer well and truly setting in, West Australians have had a touch of cold feet ahead of the festive period, with cost of living pressures putting a dampener on consumer confidence in the December quarter.
The Chamber of Commerce and Industry WA’s (CCI) Consumer Confidence Survey is the only survey of its kind in WA, canvassing the views of adult consumers in both metropolitan Perth and regional WA.
West Australians’ confidence in the economy remains above the long-term average, however growth is subdued this quarter on the back of surging petrol prices, tighter lending conditions, rising mortgage interest rates and mounting household budgetary pressures such as transport, groceries and utilities.
Three out of five consumers (60%) cited cost of living pressures as their biggest dampener on confidence. Lower income households are feeling the pinch the most, with 44 per cent of West Australians stating that their finances had worsened this quarter – almost double the number of higher-income earners.
Three out of five WA consumers (60%) reported that they were unlikely to make any major household purchases over the coming quarter, however this is down 3 per cent since last quarter and 8 per cent since the beginning of the year.
WA consumers’ financial health is mixed, with more people reporting being able to pay off their credit card but a rise in people unable to pay their bills on time. Five per cent more West Australians were able to pay their bills on time which is offset by a 6 per cent decrease in the number of consumers unable to pay off their credit or debit card in full.
Although confidence has wavered since last quarter, West Australians short and long-term outlook remains optimistic, with more West Australians believing the economy will be stronger (42%) rather than weaker (19%) in twelve months’ time – the highest proportion since February 2013.
Four out of five consumers (82%) expect the WA economy to improve or remain unchanged over the coming quarter, down 2 per cent since last quarter, and 81 per cent are anticipating stronger economic conditions for the year ahead, also down 2 per cent.
With the State Government’s Mid-Year Review to be released tomorrow, CCI urges the Government to keep a strong focus on reducing government expenditure and paying down debt. Holding State debt over the long-term exacerbates the financial difficulties of West Australians and passes the interest bill onto future generations.
Every dollar of the surplus spent now instead of paying off debt is a dollar borrowed from future generations. Paying down debt will reduce cost of living pressures in the long-term while creating a stable business investment climate, which will in turn improve job prospects, encourage wage growth and increase household spending in the WA economy.
To read CCI’s Survey of Consumer Confidence click here.