Interest rate rises, global volatility and hip pocket pain continue to impact consumer confidence readings, according to the CCIWA.
Interest rate rises, global volatility and hip pocket pain continue to impact consumer confidence readings, according to the latest report from WA’s Chamber of Commerce and Industry.
The industry body says Western Australians are bracing for economic conditions to tread water or worsen in the short term as higher living costs and trade instability persist.
The CCIWA’s latest paper indicates the threat of US tariffs continues to plague WA households. More than half of those surveyed indicated it weighed on their confidence in the March report.
Meanwhile, cost of living concerns remain front of mind for many households, even though their impact on consumer confidence remains largely unchanged compared to last quarter.
“While the impact of living costs has remained relatively unchanged from last quarter, increased volatility in the world economy, headlined by US President Trump’s tariffs, has intensified the drag from global economic news,” the CCIWA said in Monday’s report.
The key drivers plaguing WA’s consumer confidence. Photo: CCIWA
Consequently, the latest briefing indicates Western Australians with a mortgage are battening down the hatches and continuing to curb their spending habits.
In fact, most homeowners surveyed plan to use the money saved in February’s rate cut to pay off their debts or boost their savings balances.
People aged 18-39 were more likely to put the extra money into savings or investment accounts, while older homeowners were most likely to use the money to pay down their mortgage.
While the focus remains on increasing household liquidity, CCIWA chief economist Aaron Morey said there’s still a ways to go to move the needle back to spending.
“The February rate cut was clearly welcome relief for households, but it’s coming off the back of a long period of relatively high rates,” he said.
“We’re not seeing people in WA rushing to spend more on consumer goods or holidays as a result of this rate cut.
“We saw in previous consumer confidence surveys that the high cost of living was forcing many households to eat into their savings, so it’s not surprising that many people are using this rate cut to build that savings buffer up again.”
There is a light at the end of the tunnel, however: most West Aussies expect things to turn around in the long-term following the Reserve Bank’s February rate cut, which ended a five-year dry spell.
The report also indicates that employment appetites are changing, with two in five jobseekers now claiming that work from home arrangements and flexible hours were the main factor driving their employment decisions.
Looking ahead, Mr Morey said that a strong jobs market would continue to boost consumer confidence and spending in WA.
“Given this, it is critical that governments continue to support jobs in Western Australia, now and into the future,” he said.
