Despite Federal political turbulence creating instability, West Australians remain increasingly optimistic about our State’s economic prospects with consumer confidence hitting a 5-year high in the September quarter.
The Chamber of Commerce and Industry WA’s (CCI) Consumer Confidence Survey is 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 confirms that West Australians are optimistic about the future, which is good news for businesses and the economy alike, as household spending contributes over 45 per cent to the State’s total economic activity.
West Australians short and medium-term confidence are both at their highest level since March 2013 – a five-year high. This is also the first time since March 2013 that there are more West Australians that believe the economy is strengthening rather than weakening.
West Australians are seeing more job openings, they’re seeing more optimism among their friends and family and they’re slowly, but surely, more confident about the future of the WA economy.
Four out of five consumers (84%) expect the WA economy to improve or remain unchanged over the coming quarter, up two per cent since last quarter and almost half (46%) of consumers are anticipating stronger economic conditions for the year ahead, up nine per cent.
These results also indicate that WA’s economic recovery is being experienced by a broader group of West Australians. The latest lift in confidence is likely reflecting the improving jobs market in WA given that we now have the highest level of job vacancies since March 2013.
Other factors may include the Federal Government’s multi-year personal and small business tax cut package coming into effect on July 1 and proposed GST reforms being hailed by West Australians. If progressed, the GST reforms will deliver an additional $4.7 billion to WA over eight years.
Cost of living does however continue to be the biggest dampener on confidence, with costs such as groceries, utilities, and transport being cited by 60 per cent of respondents as a concern. This is down five per cent since last quarter, suggesting a slight relief on household wallets.
Given the persistence of cost of living pressures, CCI has asked West Australians which bill they would pay last if they could not afford to pay them all. Internet (24%), mobile phone bills (22%) and health insurance (22%) are the first to not be paid in favour of keeping the car (6%), electricity (7%) and water (10%) running.
Despite the uptick in confidence among West Australians, our State’s underemployment and youth unemployment remain a serious concern, with 143,000 underemployed people wanting to work more hours and a 15 per cent unemployment rate among young West Australians.
One way the State Government can act now to help these job seekers is to review their decision to reduce extended retail trading hours over Christmas by 30 per cent this year. Forcing businesses to shut their doors, which reduces the number of hours available for their staff to work, only exacerbates the State’s underemployment problem.