Most Western Australians with a mortgage will use interest rate cuts to pay off debts or add to their savings, according to CCIWA’s latest Consumer Confidence survey.
The survey of 983 people across WA, carried out in the second half of February shortly after the cash rate was lowered, asked respondents whether they were impacted by the rate decision, and what they planned to do with the saving.
Almost four in five (78%) said their finances were impacted by the rate cut, and of those, 66% said they would either put the extra money back into their savings (33%) or use it to pay down their mortgage (30%).
CCIWA Chief Economist Aaron Morey said the rate cut in February wasn’t enough to stimulate spending.
“The February rate cut was clearly welcome relief for households, but it’s coming off the back of a long period of relatively high rates,” he said.
“We’re not seeing people in WA rushing to spend more on consumer goods or holidays as a result of this rate cut.
“We saw in previous Consumer Confidence surveys that high cost of living was forcing many households to eat into their savings, so it’s not surprising that many people are using this rate cut to build that savings buffer up again.”
People aged 18-39 were more likely to put the extra money into savings or investment accounts (36%) while older homeowners aged 40-64 were most likely to use the money to pay down their mortgage (30%).
Cost of living drags
Concerns about the cost of living continues to drag on consumer confidence in WA, although the impact remains unchanged from last quarter, with seven in 10 (68%) saying it weighed on their confidence.
Global economic news, including the prospect of US tariffs, remains a concern for WA households, with more than half (55%) indicating it weighed on their confidence.
Short-term household confidence in the WA economy was down slightly in the three months to March, with just over half (55%) expecting economic conditions to remain the same in the coming quarter.
One quarter (25%) anticipate weaker conditions, while the remaining one in five (20%) expect conditions to improve.
The survey also asked what factors would drive respondents to switch jobs, with flexibility again emerging as the number one priority for jobseekers.
Over two in five (42%) WA job seekers said flexibility, including work from home arrangements and flexible hours, was the main factor driving their job-search decisions.
Morey said the results of the survey once again showed that a strong jobs market is a key support for consumer confidence and spending.
“Given this, it is critical that Governments continue to support jobs in Western Australia, now and into the future,” he said.
“Projects like the North West Shelf extension are a clear example of the type of economy-defining projects that will support our way of life, and that’s why it must be approved as soon as possible.”
CCIWA’s Economic reports, including Outlook, are available exclusively to CCIWA Complete, Advantage and Corporate Members. For more see CCIWA’s Economic Insight page.
