Almost half dip into savings as consumer confidence takes a hit in WA

Key points:

  • Consumer confidence in WA has slipped in the three months to September.
  • CCIWA’s Consumer Confidence report found cost of living pressures, interest rates and global uncertainty were weighing on household spending.
  • Almost half (49%) of those surveyed said they had drawn down on savings or offset accounts to cover the rising cost of living.

Soaring interest rates, cost of living pressures and global uncertainty have driven down consumer confidence in WA, according to CCIWA’s quarterly Consumer Confidence Report.

The survey of WA households found fewer than one in five (19%) expected economic conditions to improve in the next three months – down six percentage points since last quarter.

Around a quarter (26%) expect economic conditions to soften.

76% of people said the cost of living had dampened their confidence, whilst 64% said interest rate increases weighed on their confidence.

CCIWA Chief Economist Aaron Morey said two in five (40%) Western Australians indicated their personal finances diminished their confidence this quarter.

“Although shorter and longer-term confidence is down this quarter, it is higher than it was six months ago,” he said.

“WA’s strong jobs market continues to prop up confidence with around two in five (40%) indicating that their employment prospects are positive.

49% of those surveyed said they have drawn down on savings and offset accounts to cover the rising cost of living.

“The average amount of money West Australians have in savings has increased by $10,800 since the last quarter, sitting at just over $65,800,” Mr Morey said.

“But the median savings value in WA has continued its downward trajectory, currently sitting at $4,000. This has dropped by $1,000 since June and $2,000 since December 2022.

The data shows the total amount of interest paid on home loans has increased by 107% over the year to June 2023.

Mr Morey said we can expect the impact of future interest rate increases to continue to flow through to a greater number of households in the next year, as a significant number of households refinance their loans.

“30% of current mortgage holders said they would need to refinance their home loans in the next 12 months, and the vast majority of those (76%) said they would select a loan that is either part variable, part fixed or variable,” he said.

“Only 24% said they would choose a fully fixed rate.”

The majority of West Australians agreed the state’s payroll tax burden is hindering economic growth. Almost three in four (74%) said the State Government should take more measures to create a level playing field for WA businesses, and seven in 10 (69%) households agreed that it was unfair for WA businesses to pay a higher payroll tax than in other states.

Confidence in the State Government’s management of the economy remained high, with one in every three (34%) Western Australians considering the Government as a pillar of stability, after four consecutive budget surpluses and the recently achieved AAA credit rating.

CCIWA’s full Consumer Confidence Report is available to CCIWA members.

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