CCIWA Chief Economist
The confidence of WA households is withstanding the pressure of rising prices and interest rates, even edging slightly higher in CCIWA’s latest Consumer Confidence Survey.
More West Australians expect the economy to improve (28 per cent), than expect it to weaken (22 per cent) in the next three months. Confidence over the coming year also improved, with two in five (43 per cent) expecting conditions in the economy to strengthen. It reverses the balance last quarter, when more West Australians anticipated weaker conditions.
The optimism arose from the continued jobs boom and confidence in the State Government, and follows the reopening of WA’s borders.
Amid this jobs boom, West Australians continue to reassess their work preferences. Two in every five (41 per cent) West Australians are looking for a new job, with younger people the most driven (55 per cent). The possibility of career advancement (14 per cent) higher pay (12 per cent) and changing career paths (11 per cent) drove this change. Fewer West Australians are interested in a “9-to-5”, with one third (31 per cent) of respondents willing to accept less pay in exchange for more flexible hours and conditions.
Nevertheless, households are also weathering a gale of negative headwinds this winter. Along with rising concern about living costs (76 per cent), and global events such as the war in Ukraine (59 per cent), worries over interest rates more than doubled since last May. Surging 22 points this quarter, it is now cited as a concern by three in five households (58 per cent). The survey shows two thirds (66 per cent) of WA mortgage-holders set to reduce discretionary spending, and half (51 per cent) reducing essential spending, if the cash rate hits 2 per cent.
Looking forward, WA households will undoubtedly feel rising pressure from interest rates and other forces. However significant additions to savings balances and mortgage offset accounts will hold the local consumer economy in good stead.