CCIWA Chief Economist
Sunday, 22 March 202
The confidence of Western Australian consumers has plunged to its lowest level in three years, driven by fear about the global spread of COVID-19.
The steep decline was recorded by the Chamber of Commerce and Industry WA’s Consumer Confidence Survey, in the first snapshot of WA household sentiment since the outbreak of the virus.
The survey shows an eight percentage point decline in the short-term outlook, with only 15 per cent of Western Australians now expecting better conditions in the next three months.
Two out of three (71 per cent) consumers expect conditions to get worse or remain unchanged for 12 months.
Nearly three in five (57 per cent) Western Australians said global economic news detracted from their confidence, an increase of 13 per cent on the year.
The news was of deeper concern for older Western Australians, with six in ten (62 per cent) people aged over 45 citing the issue as a concern, compared to 50 per cent of younger people.
Regional West Australians were also still feeling the effects of the summer bushfires, with a ten percentage point weakening of expectations for the next 12 months.
Significantly, these survey results were taken at the beginning of the COVID-19 outbreak. Consumer confidence would have deteriorated markedly since.
The withdrawal of domestic consumer spending from the economy represents a double-hit for local businesses, already reeling from the loss of overseas visitor expenditure. This is more bad news for WA’s retail sector, which suffered its worst December-January performance in retail turnover since the Global Financial Crisis.
The business community has welcomed the State and Federal Governments’ recognition of the key role of small and medium businesses to protecting jobs and the economy. The stimulus measures have focused on relieving cost pressures on business and bringing forward business investment, which are vital steps to bolster the WA economy against COVID-19. As the response develops, both levels of government should accelerate their red tape improvement agendas, and work together to bring forward infrastructure maintenance spending.
Local governments should also play their part and ensure they avoid spending money on non-essential projects, to ensure council rates and charges are kept to the lowest levels possible.