Household confidence has dropped as rising costs and interest rates weigh on the minds of West Australians, according to CCIWA’s latest Consumer Confidence report.
Amid the turbulent conditions, our September survey showed West Australians were becoming more circumspect in their spending and choice of brands.
Weaker economic conditions are anticipated by around one in four WA households, both in the short term (26 per cent) and looking out to the next 12 months (29 per cent). One in three WA households (36 per cent) anticipate the economy will improve in the coming year, down 6 points.
Rising costs remain the biggest drag on consumer confidence, with three quarters of respondents (73 per cent) feeling the pinch.
Concern about interest rates reached a new high — leaping 27 points since the rate hikes began — reported by three in five (63 per cent) respondents.
Other factors dimming sentiment include surging global price levels, the ongoing Russo-Ukrainian conflict and enduring tensions with China.
Meanwhile, confidence in the State Government (43 per cent) and continued strong employment prospects (36 per cent) stabilised the mood of households.
Echoing this focus on our State’s jobs market, West Australians have strongly backed reducing the burden of the tax on jobs. Asked about their view of WA’s payroll tax, just under two thirds (65 per cent) think that it isn’t fair WA businesses pay a higher level of payroll tax than businesses in other states — only one in 10 (10 per cent) disagree.
Both the pandemic and higher prices have also seen West Australians re-thinking their spending choices. Three quarters of respondents (76 per cent) said they had swapped brands in the past year, with price (47 per cent) being the dominant factor.
Factors like supporting local business (21 per cent) and environmental considerations (19 per cent) were also at play. In choosing a brand, West Australians nominated corporate transparency (71 per cent) and good environmental practices (70 per cent) as important to their decisions.
Despite price pressures, one in five (22 per cent) of respondents are set to travel overseas in the next year, with the average traveller committing $9000 to their trip.
CCIWA Chief Economist Aaron Morey said as WA households adjust to rising costs, they look to the strength of the jobs market for reassurance.
“The best thing the WA Government could do for our competitiveness and economic growth, would be to ease the high cost burden imposed by the tax on jobs,” he said.