Bankwest’s Spend Trends analysis for October has highlighted the financial strain being experienced by Western Australians as cost-of-living pressures appear to be spreading beyond Millennials and hitting all generations.
Bankwest’s Spend Trends report tracks WA customer credit and debit activity to identify insights in response to economic conditions, with October’s results showing the activity of all key spending generations having contracted.
The number of unique customers spending declined year-on-year for Millennials (-3.2%), Gen X (-2.5%), and even Baby Boomers (-1.7%), the latter of which had previously seemed reluctant to rein in spending.
The cost-of-living pressures were underscored by the year-on-year growth in transaction value (7%) compared to the negligible two per cent increase in volume, suggesting people were paying more for the same amount.
The financial squeeze also appeared to be influencing the volume of spending, which stalled year-on-year for all generations at 0.1 per cent for Millennials, and one per cent for Gen X and Baby Boomers.
The belt-tightening was highlighted by the fact that just two of the 25 sectors tracked experienced year-on-year growth in the double-digits for the number of customers spending, while 18 either showed no growth or contracted.
Only Travel Agencies (20%) and Airlines (10%) grew significantly compared to the same time last year, while sectors such as Electrical Appliances (-29%), Repair Shops (-25%), and Department Stores (-17%) declined steeply.
Conversely, 18 of the 25 sectors grew in year-on-year transaction value, as costs outpaced spending volumes.
The sectors leading the disparity between year-on-year value and volume growth were Electrical Appliance retailers (value +31%, volume -7%), Repair Shops (+15%, -13%), and Department Stores (+4%, -14%).
Bankwest General Manager Products and Digital Services Peter Bouhlas said: “Bankwest’s Spend Trends data has shown contracting spending for a while, but cost-of-living pressures now seem to be hitting a range of people.
“Millennials, who in general terms are more likely to be carrying greater debt due to the stage of their lives, have shown slowed spending for months, but we’re now seeing declines for Gen X and even Baby Boomers.
“The travel sector is really the only area to experience year-on-year growth of any significance, but we also need to remember the low base at which that sector is coming from, so it’s probably no surprise to see those results.
“The disparity between transaction values and volumes is a topic of public commentary at the moment, and that shows up in Bankwest’s Spend Trends data, with people paying significantly more than they did this time last year.
“It’s clear from this analysis that cost-of-living pressures are being felt by many, and I urge any customers experiencing financial difficulties to get in touch as soon as possible so we can support their individual needs.”