WA household confidence up, but cost pressures remain

Western Australians are more confident about the economy than at the height of the fuel crisis earlier this year, but cost-of-living pressure continues to dampen their outlook.

CCIWA’s June Consumer Confidence Survey found 45% of WA households expected economic conditions would worsen in the coming year. This was down from 60% in late March, after the Middle East conflict began, but remained well above the 31% recorded pre-crisis in late February.

CCIWA Chief Economist Dr Daniel Kiely said the temporary fuel excise cut, which helped stabilise prices, likely contributed to the improved sentiment. The fuel excise cut is due to be phased out by August 2.

“The big test will come when that fuel excise cut is [fully] removed, when we expect to see prices at the bowser go back up,” he said.

“We continue to call on the Federal Government to extend the excise cut and review it on a rolling basis to avoid another fuel price shock for households and businesses.”

Spending shoestrings loosen

Consumers were becoming more willing to spend on non-essential items.

In March, 82% of households said they planned to cut discretionary spending, compared to 57% in the latest survey.

“We can see that more than half of people surveyed plan to make cuts across a whole range of spending areas, with dining out at cafes and restaurants likely to be the first to go,” Kiely said.

“This reflects the overall uncertainty through the economy and the impact of mounting living costs.”

Nearly half (48%) of consumers said the conflict had shaken confidence in their financial future.

Cost support measures

The survey also asked households what type of government relief would best help them manage rising living costs:

• 62% wanted utility bill relief
• 59% wanted support for stable petrol and energy prices

No utility support measures were included in this year’s State or Federal budgets.

“Measures like the fuel excise cut have been extremely popular with the WA community and have been effective in bringing down prices,” Kiely said.

“Even if fuel is to start flowing through the Strait of Hormuz again, it will take some time for fuel prices and certainty around long-term supply to return to pre-crisis levels, strengthening our calls for the excise cut to be extended beyond June 30 and reviewed on a rolling basis.”

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