West Australians are limping across the finish line of 2019, ending the decade with subdued confidence and personal finances impacted by external factors.
The Chamber of Commerce and Industry WA’s (CCIWA) Consumer Confidence Survey is the only survey of its kind in WA, canvassing the views of West Australians in the Perth metro area and across the regions.
West Australians have experienced mixed fortunes in 2019, with 34 per cent reporting deteriorating personal finances this year and one in four (27 per cent) noting worsening job prospects. This is almost double the proportion who reported improving job prospects (15 per cent). Overall confidence in the economy fell 1.4 index points, dropping to its lowest level in over two years.
Expectations for 2020 are low, with only 16 per cent of consumers anticipating improvements early next year. Four out of five consumers expect the WA economy to worsen or remain the same in 2020.
The survey assesses eight separate factors impacting confidence. Not one factor was identified as positively impacting perceptions of the economy by WA consumers, with living costs like groceries and utilities the biggest issue dragging down confidence (65 per cent). Global headwinds such as the US-China trade war, Brexit and issues in the Eurozone were of concern to 53 per cent of WA consumers, while the domestic economy worried 43 per cent.
Critically, interest rate cuts are no longer effective in stoking optimism in WA, with consumers growing more concerned as rates are successively cut, rather than more confident. More WA households now view rate cuts as negative for confidence (39 per cent) than positive (32 per cent). It indicates that West Australians see the RBA’s rapid-fire cuts to the cash rate as a sign of alarm about the health of the economy.
There are signs of financial strain, with one in five (22 per cent) West Australians unable to pay their bills on time and around one third (32 per cent) spending more than what they earned over the last three months. 40 per cent of lower income households (<$50,000 pa) reported being financially worse off at the end of 2019. Overall West Australians remain cautious about spending, with six out of ten (65 per cent) holding off from big purchases in the short term.
CCIWA has welcomed the State Government’s continued focus on spending discipline announced in yesterday’s Mid-Year Review. Continuing to pay down debt will help to alleviate cost of living pressures in the long term. The Government has listened to CCIWA’s calls to remove barriers to economic growth and job creation by reducing the payroll tax burden and reintroducing Perth’s status as a region for migration purposes. The Government could further boost jobs and the economy by accelerating the Streamline WA process, reforming retail shopping restrictions and enabling the Roe 8 project to be independently assessed by Infrastructure WA.
For more on the economy visit waeconomy.cciwa.com
