West Australians’ confidence in the economy has dropped to its lowest level since December 2017 on the back of global headwinds and commentary that Australia is facing the threat of a recession.
This is in contrast to the June quarter’s results which saw both short-term and medium-term confidence improve. Only 18 per cent of West Australians expect the WA economy to improve in the short-term and only one in three expect conditions to improve over the next 12 months – both down 11 per cent since the June quarter.
These are the findings of the Chamber of Commerce and Industry WA’s (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.
Escalating trade tensions between the US and China, ongoing challenges in the United Kingdom and the Eurozone and commentary that Australia is heading towards a recession have weighed heavily on West Australians’ confidence in the economy, with their overall confidence taking a dive at the same time that their personal finances and job prospects have improved.
Almost six out of ten (56%) West Australians believe global economic news has negatively affected their confidence, up 19 per cent since last quarter, and almost one in two (45%) had their confidence dimmed by domestic economic news – up 15 per cent.
This compares to almost one in four West Australians (24%) considering their personal finances to have improved over the past year – up 3 per cent since the June quarter – and their perception of job prospects has also increased, up 2 per cent.
While there were improvements in consumers’ perception of job security, there is unfortunately still cause for concern, with a quarter of respondents (25%) considering their employment prospects to have worsened over the past year.
Cost of living continues to be the biggest dampener on consumer confidence, with three out of five (60%) West Australians considering living costs such as transport, groceries and utilities stifling their confidence in the economy and almost two-thirds (63%) do not expect to make a major purchase in the next quarter, including 81 per cent of lower-income households – up 6 per cent.
Small businesses in WA employ more than 500,000 West Australians, which means supporting small businesses supports West Australians livelihoods. To boost confidence in the economy, businesses must be supported to invest and create jobs and consumers must feel confident to spend their discretionary income.
A key lever the State Government can pull right now to boost confidence and job creation is to reduce its tax on jobs. Payroll tax is a critical lever because it supports every industry, from manufacturers to construction, retailers and hospitality businesses.
To read CCI’s Consumer Confidence Survey click here.
