West Australians’ confidence in the economy has rebounded to a six-year high in the June quarter, with a surge in optimism resulting from a re-elected Federal Government and lower interest rates.
This is in contrast to last quarter’s results which saw both short-term and medium-term confidence decline ahead of the Federal election. More than four out of five West Australians (84%) expect the economy to improve or remain the same in the short-term and 81 per cent in the medium-term.
These are the findings of the CCI Consumer Confidence Survey – the only survey of its kind in WA, canvassing the views of adult consumers in both metropolitan Perth and regional WA.
The Federal Election had a significant influence on confidence this quarter, with almost half (44%) of West Australians stating that the Federal Government’s re-election boosted their confidence in the economy, up 18 per cent since last quarter.
The RBA’s decision to cut the cash rate to a record low 1.25 per cent have also had the intended positive affect, with two out of five (42%) respondents citing interest rates as a key contributor to their increased optimism – up 10 per cent.
WA businesses continue to struggle from consumers’ reluctance to part with discretionary cash, which means boosting consumer confidence is critical to stimulate the WA economy.
Despite cost of living pressures easing slightly this quarter, it continues to be cited by West Australians as the most significant factor holding their confidence back. Almost three in five (58%) West Australians said living costs such as transport, groceries and utilities stifled their confidence in the economy and almost two-thirds (65%) do not expect to make a major purchase in the next quarter, including three out of four (75%) lower-income households.
WA consumers’ overall financial health remains a concern, with more people reporting that they are unable to pay their bills on time, up 4 per cent to 20 per cent, as well as an increase in the number of people unable to pay off their credit card, up 1 per cent to 20 per cent.
Almost three times as many lower income earners (26%) experienced a period of unemployment over the last three months compared with higher income earners (9%) – up 8 per cent since the March quarter – at the same time that youth unemployment in WA has hit the highest in the country.
We should be concerned by the very difficult business conditions for retailers and the subsequent high rate of unemployment among some of our most vulnerable. WA’s youth unemployment problem is a result of a struggling retail which is a significant employer of our young people. 8,900 West Australians want a job in the retail sector but are unable to find one.
Online shopping has turned the retail trading hours debate on its head and our politicians need to realise that decades of big changes have occurred in the market. WA’s laws are not keeping up and while every other state has made progress these laws are costing WA jobs.
We don’t tell Google or Amazon to shut down their website, but we force WA businesses to shut their doors. It’s critical that the State Government and Opposition act now to implement incremental changes to WA’s outdated retail trading hours and regulations to support WA retailers to compete.
To read CCI’s Consumer Confidence Survey click here.