Retailers left out in the cold as domestic economy returns to growth

Western Australia’s domestic economy is showing mixed results in the latest national accounts, growing by 0.4 per cent after two consecutive quarters of decline.

The 0.4 per cent growth (state final demand) follows a contraction last quarter of 0.4 per cent, revised down from 0.2 per cent growth.

Business investment has grown by 1.8 per cent – the first growth since December 2017. This was led by an increase in investment in machinery and equipment which signals businesses are optimistic about the future.

We expect the rise in business investment to begin to filter through to households in the form of higher employment and wages growth soon.

WA households are however still feeling the pinch, with a slight backwards step in household spending of 0.1 per cent.

This is making things difficult for sectors that are reliant on consumer discretionary spending, such as retail, that are already struggling with online competition and a State Government forcing them to reduce opening hours this Christmas.

This is supported by the latest WA Super–CCI Business Confidence Survey which revealed that business confidence in WA has reached its highest level since March 2013 – a five-year high – as optimism rises about the State’s economic outlook.

This optimism isn’t however flowing through to retail, with 34 per cent of retailers expecting conditions to deteriorate over the coming year and 52 per cent expecting no change in economic conditions.

One way the State Government can act now to support local WA retailers is to review their decision to reduce extended shopping hours over Christmas by 30 per cent this year.

CCI will release its forecasts for the WA economy in January which will include a comprehensive analysis of what to expect from the next three years of economic activity.

You may also be interested in

Environmental approvals move to digital platform
Environmental approvals move to digital platform
Businesses requiring environmental approvals in WA will be able to work through a more streamlined digital process with the launch of the first phase of...
Read more »
Students gain skills, insight at economic forums
Students gain skills, insight at economic forums
Economics students from across the State gained skills that will help them in their studies and future careers during the Student Economic Forum 2022.
Read more »
State launches Commissioning Strategy for community services
State launches Commissioning Strategy for community services
The State Government has launched WA’s first State Commissioning Strategy for community services in a bid to deliver more efficient and effective services. 
Read more »