Consumer confidence plunges to historic low

Consumer sentiment has plunged to a new record low in Western Australia, falling 13.8 index points since the start of the COVID-19 crisis. The Chamber of Commerce and Industry WA Consumer Confidence Survey shows that more than four in five (81 per cent) Western Australians have a negative outlook due to COVID-19.

Three in five Western Australians (61 per cent) expect the economy to weaken in the next three months, a 27 per cent increase since the beginning of March. There was striking uncertainty about the economy in the longer term, with two in five (43 per cent) Western Australians expecting conditions to worsen over the next twelve months, while a third (36 per cent) believed things would improve.

The results also showed considerable job disruption from the constraints on business, with casual workers bearing the brunt. Around 21 per cent of casuals reported they had lost their jobs and another 9 per cent said they had left the workforce. There was disruption in every major employment category since the start of the pandemic, with 7 per cent of full- time workers, 9 per cent of part-time workers and 10 per cent of sole traders now unemployed. Around 8 per cent of full-time workers have moved into either casual or part-time roles. Western Australians’ perceptions of their job prospects and personal finances also hit a four-year low.

There were however positive indications for WA’s recovery, with households indicating they are ready to emerge from hibernation and spend in the economy again. The number one spending item on the agenda was a local holiday, with 54 per cent of those surveyed reporting an intention to holiday within WA. This was more than double the number who were keen to travel again internationally (23 per cent), reflecting caution about the reopening of Australia’s borders. However, if a month were to pass without growth in domestic cases, support to reopen WA’s interstate borders increased from 7 per cent to 75 per cent among respondents.

Our hard-hit restaurants and cafes will be encouraged by the 43 per cent of respondents who are looking forward to eating out more. At the same time over a third (34 per cent) of consumers are keen on a social outing to a pub or bar.

The return of household spending into the economy will be a critical component of WA’s economic recovery. More than four in five Western Australians (84 per cent) favoured growing the economy instead of putting up taxes in order to pay off the debt taken on by governments to finance their responses. Only 14 per cent of those surveyed supported higher taxes. Consistent with this, 96 per cent of consumers indicated a clear plan from governments to grow the economy would bolster their confidence. This strong view reinforces CCIWA’s calls to improve conditions for business in our State, with a lower tax burden, fewer regulations that hinder business activity, and upgrades to our skills and infrastructure.

Read the full CCIWA Consumer Confidence Survey Report report here.

Aaron Morey

CCIWA Chief Economist

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