Western Australians have indicated they will slash discretionary spending in the second half of 2024, as cost-of-living concerns continue to bite.
CCIWA’s Consumer Confidence survey for the June quarter found almost four in five (78%) respondents identified cost-of-living pressures as weighing down their outlook on the economy – an increase of five percentage points from the previous survey in March.
The survey found more than half (53%) would reduce or significantly reduce spending at cafes, restaurants, pubs and bars to combat rising cost pressures in the second half of 2024.
Consumer goods were the next category identified, with 51% of those surveyed reporting they would cut back, while 50% said they would reduce spending on travel and holidays.
Of the 900 people surveyed, 40% said they would cut back on groceries.
Those most likely to cut back on spending were renters, with more than three in five (64%) of renting households indicating they will cut back on eating out.
CCIWA Chief Economist Aaron Morey said despite the cost-of-living measures announced in the State and Federal budgets, many households were still feeling unsettled.
“The five-percentage point increase in concern about the cost of living shows that even with inflation coming down, the elevated cost of living is still weighing down confidence,” he said,
“As a result, many households are looking for ways to spend less, and discretionary spending is the most obvious way they can do that.”
Despite ongoing pessimism around the cost of living, most survey respondents indicated they were confident about WA’s economic outlook, driven by a robust employment market.
Short-term consumer confidence has remained steady in the June quarter, with 73% expecting economic conditions to remain the same or improve, with the remaining 27% expecting conditions to worsen.
“Despite the ongoing cost pressures on households, the WA economy remains resilient thanks largely to the ongoing strength of our employment market,” Mr Morey said.
“However, the proportion of Western Australians who identify job prospects as a positive for their outlook has been slowly declining over the last 12 months, reflecting the slight loosening in our still very strong jobs market.”
More than three in five (63%) respondents said interest rates weighed down their outlook on the economy, up eight percentage points since March.
“This likely reflects the fact that hopes have rapidly faded we would see an interest rate cut in the second half of this year,” Mr Morey said.
33% of respondents said the State Government had a positive effect on their confidence, likely a result of the Government delivering a sixth consecutive budget surplus in May, with further healthy surpluses expected in the coming years.
