Western Australians have hit the pause button on spending as cost-of-living and inflationary pressures take hold, with Bankwest’s Spend Trends data for July showing the volume and value of transactions falling across the board.
Bankwest looked at WA customer credit and debit transactions for July and tracked month-on-month and year-on-year spending trends to provide insights into the community’s response to changing economic conditions.
The previous Spend Trends analysis, which looked at the entire 2022 Financial Year (Jul 21-Jun 22), showed Western Australians appeared reluctant to rein in discretionary spending, despite financial pressures.
However, the data for July showed that trend rapidly reversing, with sectors such as Clothing Stores, Department Stores, Electrical Appliance retailers, Hardware Stores, and Interior Furnishings all declining in transactions.
Western Australians appeared to be pulling back most on household spending, with Hardware Stores leading the decline month-on-month (-4% volume; -17% value), and Interior Furnishings (-4% volume; -9% value) close behind.
The financial impact of fuel prices also had motorists scale back at the bowser, with the volume of transactions falling by three per cent, and the value by one per cent month-on-month, but the year-on-year figures were telling.
The volume of transactions at Service Stations when comparing July 2021 to July 2022 increased by only three per cent, however, their value soared 29 per cent, highlighting the cost blowouts of fuel due to global tensions.
The Recreation sector, which includes activities such as movie theatres, live music, sport, and events, was one of few to experience significant growth month-on-month, increasing nine per cent in volume and 16 per cent in value.
The data also showed signs of the travel sector cooling after months of growth, with Airlines falling 12 per cent in the volume of transactions and nine per cent in value month-on-month.
It was a similar trend for Hotels/Motels, which fell 14 per cent in volume but grew four per cent in value, and Travel Agencies, which grew four per cent in volume but fell eight per cent in value month-on-month.
However, the year-on-year figures suggested the declines could be absorbed, with Airlines up 201 per cent in volume and 325 per cent in value, and Travel Agents 110 per cent and 301 per cent, respectively, against July 2021.
Bankwest Chief Customer Officer Paul Vivian said: “Western Australians are facing some challenging financial pressures at the moment, with inflation, supply chain, and cost-of-living impacts combining to hit hip pockets.
“It was interesting to see last month’s data, which suggested the community was mostly resisting pulling back on discretionary spending, but Western Australians are now clearly reversing that, with declines across the board.
“We’re potentially seeing costs stabilise in certain sectors, such as Food Stores and Warehouses, which include supermarkets, as well the Pharmacy sector, with month-on-month spending flat in both volume and value.
“That’s a similar story for sectors dependent on the cost of fuel, such as Service Stations and Other Transport, but the concern for consumers is those costs have stabilised at significantly higher levels than they’re used to.
“We believe challenging economic conditions may be here to stay for a while, so we encourage all customers to ensure they are in the best possible financial position and for those experiencing difficulties to get in touch.”