Consumer confidence in Western Australian has collapsed to levels lower than during the COVID-19 pandemic, driven by the Middle East conflict and its impact on fuel supply and prices.
CCIWA conducted a snap survey of more than 1,000 WA households between March 24th and March 29th to determine what impact the conflict is having on spending habits and Easter holiday plans.
An overwhelming 82% of consumers plan to reduce spending in at least one discretionary spending category in the coming six months.
CCIWA Chief Executive, Will Golsby, said the results sent a worrying signal to WA businesses.
“This represents another challenge for WA businesses, who are being directly hit by the increase in their own fuel prices and operating costs, and will also feel the impact of weakening demand and lower consumer spending,” he said.
“To see consumer confidence drop to lower levels than COVID will be alarming for many businesses, but we saw during that crisis that businesses were resilient and able to adapt, with appropriate support from Government.
“We urge all levels of Government – Federal, State and Local councils – to look at what fees, charges and taxes could be reduced or suspended during this crisis.”
Around one in three (31%) WA households said they had cancelled or significantly changed their Easter travel plans because of high fuel costs.
One in four (25%) said they would keep their Easter holiday travel plans but would spend less on things like eating out or visiting attractions while on holiday.
Mr Golsby said it will be a blow for businesses in tourism and hospitality, particularly in regional WA.
“The Easter holiday period is usually one of the busiest times of the year for many businesses and some regions are also dealing with the damage caused by Cyclone Narelle,” he said.
“We’re also continuing to monitor fuel supply challenges in regional WA, as well as the impact of fertilizer shortages on the agricultural sector as seeding season gets underway.”
The survey found Western Australians were broadly supportive of robust measures to ensure fuel supplies are maintained. Two in three respondents (67%) said they would support purchase limits on fuel if shortages worsened.
Half of those surveyed said they would look to increase their use of public transport to offset further fuel cost increase s, while 61% supported free or discounted public transport.
CCIWA Chief Economist, Dr Daniel Kiely, said while measures like the Federal fuel excise cut and suspension of the Road User Charge would help businesses in the short-term, other measures to help business should be on the table.
“While supports to business will have budgetary implications, the cost of taking no action would have a greater impact on businesses, employment and the economy over the longer term, he said.”
“We don’t know how long this conflict will continue so it’s vital every measure is on the table to keep businesses operating, employing WA workers and driving the economy.”
