Western Australian households are more optimistic about their finances than they have been for three years, despite concern about the cost-of-living reaching a nine-month high and a large number planning to rein in spending.
CCIWA’s quarterly Consumer Confidence survey of more than 900 WA households throughout May, found two in five (39%) expect economic conditions to improve in the next 12 months – the highest number since 2022.
Despite the surge in confidence, the high cost-of-living is still weighing on WA households, with seven in 10 (72%) reporting it as a drag on their confidence, up four percentage points since the March quarter.
CCIWA Chief Economist, Aaron Morey, said a significant number of households planned to scale back their discretionary spending, despite the rosier outlook.
“Around half of those surveyed said they would reduce their spending on things like cafes and restaurants (53%), consumer goods (51%) and recreation and holidays (45%),” he said.
“Those most likely to reduce spending were renters, who haven’t had the benefit of interest rate cuts flow through to them.”
Mr Morey said the recent rate cuts are clearly having a positive impact overall, despite the fact that prices still remained high.
“Just over a third (37%) of respondents said interest rates weighed down their confidence, but that’s down a significant 11 percentage points since the March quarter and is the lowest proportion since March 2022,” he said.
“So even though households still feel they’re paying more for everyday items, they’ve been buoyed by the extra money in their bank accounts from reduced interest rates.”
Mr Morey said local and global events have also had an impact – both positive and negative.
“The survey respondents also told us that the state and federal elections, which delivered clear and decisive results, have had a positive impact on their confidence in the economy,” he said.
“More than two in five (44%) households said the Cook Labor government boosted their confidence, up seven percentage points from the March quarter, while two in five (38%) said the same about the return of the Albanese Labor government in Canberra, an increase of 11 percentage points from March.
“On the downside, almost three in five (58%) of households said global economic news, including the US tariffs and conflict in the Middle East, weighed down their outlook – three percentage points higher than last quarter.”
The survey also found flexibility remained the number one factor driving jobseekers, with more than two in five (43%) identifying it as a top priority, ahead of increased pay (28%).
