Consumer confidence wanes under cost pressures

The confidence of WA households has dropped from the record highs of 2020–2021, according to CCIWA’s latest Consumer Confidence Survey.

Rampaging global inflation, the prospect of interest rate hikes, the invasion of Ukraine, and the arrival of Omicron in WA have all driven down short-term confidence, and our medium-term confidence has taken a hit, too.

In the short-term outlook, consumer confidence fell by 12.3 percentage points. For the first time since September 2020, more West Australians expect economic conditions to weaken (32 per cent), than to improve (24 per cent).

Amid supply chain disruptions and higher fuel prices, cost of living pressures emerged as the biggest issue dragging down confidence. These weighed on the outlook of nearly two-thirds of West Australians (65 per cent).

Concern about the presence of COVID in WA is nearly as acute (63 per cent), with Western Australians indicating they are set to scale back their attendance at concerts, sport and festivals (63 per cent), bars and restaurants (58 per cent) and shopping centres (50 per cent).

Read the full report here.

West  Australians are also bracing for an increase in mortgage interest rates, with 25 per cent indicating they could not absorb additional costs and 21 per cent unsure of how they’d be affected.

Around one in three of those people surveyed indicated that an increase in mortgage rates this year would mean they’d spend less on the following expenses:

  • Consumer goods;
  • Cafes and restaurants;
  • Recreation, holidays, etc;
  • Bars, clubs and pubs; and
  • Homewares, furniture, renovations, etc.

“As shown by CCIWA’s Outlook, these factors are expected to dent, but not derail WA’s economic trajectory. WA remains a hot jobs market, with personal employment stabilising the confidence of one in three households (34%), along with confidence in the State Government (43%),” said CCIWA Chief Economist Aaron Morey.

Lifestyle changes

There’s another interesting fact showing up in the figures: COVID-19 could be changing people’s living arrangement preferences.

Nearly one-third (30 per cent) of West Australians are now more likely to prefer living in a house over an apartment since COVID-19 hit.

About three out of 10 (29 per cent) are now more likely to prefer living in the outer suburbs rather than inner city, and more than one in five (23 per cent) now prefer to live in a larger house or block.

Further, we can expect to see continued support for online shopping, with nearly two out of five (38 per cent) West Australians planning to spend more online.

At the same time one-quarter of survey respondents indicated they’d be increasing their contributions to personal savings.

 

For more economic analysis see CCIWA’s Economic Insight page.

For general employee advice and guidance, contact CCIWA’s Employee Relations Advice Centre on (08) 9365 7660 or email advice@cciwa.com.

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