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WA Consumer Confidence continues 4-year hot streak

The four-year high in West Australians’ consumer confidence is continuing its hot streak, but further growth is constrained by cost of living pressures for households.

This is the message from the Chamber of Commerce and Industry WA’s (CCI) Survey of Consumer Confidence – the only survey of its kind in WA, canvassing the views of adult consumers in both metropolitan Perth and regional WA.

CCI’s latest Survey of Consumer Confidence confirms that West Australians are feeling more confident about their short-term and medium-term prospects, both the highest since December 2013 – a four-year high.

This growing confidence in WA’s economy is however coming off a low base following the unwinding of the mining construction boom. While there are green shoots in the economy and more optimism on the horizon, a more positive outlook for the WA economy is filtering through to households slowly.

One in three WA consumers (33%) reported that they spent more than they earned last quarter, while 65 per cent of respondents cited costs such as groceries, utilities, and transport as their biggest dampener on confidence.

Three in five (64%) consumers indicated they would not be making a major household purchase of more than $2,000 in the coming quarter. One in five consumers (18%) reported that they were unable to pay off their credit card debt in full at the end of the month.

Cost of living is the most important issue to voters in every state, including WA, according to national polling of 2,350 Australians, commissioned by CCI.

Perceptions of the WA State Government and Federal Government’s role in managing the economy are improving in WA. One out of three consumers (34%) believed that the State Government’s activities positively influenced their confidence in the economy and 28 per cent for the Federal Government’s activities, up 6 per cent and 8 per cent respectively.

An additional 10 per cent of consumers earning less than $60,000 believed the Federal Government impacted positively on their outlook which is likely linked to recently introduced income tax cuts.

CCI’s success in convincing the Productivity Commission that the GST distribution should be changed to boost the national economy, and the Federal Government’s interim response, will boost confidence in WA households if the reforms proceed. For too long WA’s GST share has weighed heavily on the minds of businesses and consumers and this may finally change.

Both the Federal and State Government must continue to help attract business investment in WA so that new jobs can continue to be created and confidence continues to rise.

*All comments are attributable to CCI Chief Economist Rick Newnham.

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