Christmas spending edges up, despite households under pressure

Cost-of-living and interest rate pressures are expected to hamper Western Australians’ spending this festive season, a new CCIWA report finds.

According to CCIWA’s quarterly Consumer Confidence report, WA consumers are expected to spend $5.1 billion over the holiday period, averaging $1,000 per household – a similar figure to 2022.

Two in five (41%) Western Australians expect to spend the same amount as they did last year, with a similar number (39%) set to rein in spending. One in five (21%) expect to spend more.

This shows consumers are likely to spend slightly more than in 2022, as last year’s December report found 38% said they’d spend less, 17% would spend more and 43% would spend the same.

CCIWA Chief Economist Aaron Morey says despite the steady consumer sentiment heading into Christmas, financial pressure is still a major concern.

“We’ve seen a seven-percentage point increase in the number of WA households experiencing financial stress compared with the same time last year,” he says.

“59% of WA households have told us they’ve experienced one financial stressor in the last three months, and 28% experienced at least two.

“The fact that more than half expect to spend the same or more despite these factors is a sign of continued confidence in our economy, underpinned by a very stable jobs market in WA.”

Generation gap

The report shows a generation gap with spending intentions over the holidays.

A third of young people aged 18-39 are expected to spend more than last year, compared to only 10% of people aged over 65.

“This could be driven by a number of factors, including increased travel by younger people over the holiday period,” Morey says.

Consumers’ economic outlook

Over the next three months, almost one half (49%) of consumers are confident that economic conditions will remain the same. This is balanced by one in five (21%) expecting conditions to strengthen – up by two percentage points from the last quarter – and the remaining three in 10 (30%) taking a more pessimistic outlook.

Looking ahead for 2024, consumer confidence drops, with one in three (33%) anticipating conditions to improve or stay the same.

Despite WA households taking either a cautious or pessimistic view, they are more optimistic than the rest of the nation.

The latest Westpac-Melbourne Institute Consumer Sentiment Index was -2.6% in November, compared to CCIWA’s Consumer Confidence Index of -2% for 12 months and neutral (0%) for three months.

Consumer confidence influences

Increased living costs are the greatest concern for (71%) WA households. However, this is the lowest figure for living costs since March 2022, likely reflecting the gradual decline in inflation throughout 2023.

Also hindering confidence are interest rates (64%), global economic news (57%) and personal finances (40%).

On the flipside, confidence is held up by strong employment prospects (40%) and economic stability led by confidence in the State Government (34%).

CCIWA’s Economic reports, including Outlook, are available exclusively to CCIWA Advantage and Corporate Members. For more see CCIWA’s Economic Insight page. 

Share This Post

Related

Project EOI open: funding barriers for small businesses in defence
A Pilot Fund project, through Defence and other agencies, aims to investigate funding barriers facing small businesses in the defence sector.
Read more »
Australian Parliament House.
‘Nature Positive’ committee to hear from CCIWA despite avoiding WA
A Senate Committee investigating the planned overhaul of Australia’s environmental approvals system holding its only public hearing in Canberra is an insult to WA, CCIWA Chief Economist Aaron Morey says.
Read more »
Xplorate expanding aerial intelligence presence globally
WA-based aerial intelligence company Xplorate anticipates at least four-fold growth in the next 12 months and beyond, as it expands internationally.
Read more »