Bankwest’s Spend Trends analysis for June has revealed a fourth-consecutive month of flatlined spending activity, as Western Australians attempt to manage their budgets through rising costs of living and inflationary pressures.
Bankwest’s Spend Trends report tracks WA customer credit and debit activity to identify insights into community responses to economic conditions, with spending activity having stalled or declined for the fourth straight month.
Spending for June, whether month-on-month or year-on-year, either went backwards or showed negligible growth, as fewer Western Australians transacted in lower volumes and at stagnated value levels.
Only three of the 25 categories analysed showed year-on-year growth in the number of customers transacting, with more than half having flatlined or declined, however, other figures suggested a cohort remained happy to spend.
Year-on-year transaction volumes continued to grow strongly for Travel Agencies (38%), Other Transport (26%), Hotel/Motel (22%), Airlines (13%), with the value of those transactions reflecting a similar trend.
Bankwest last month analysed a generational breakdown of the Spend Trends data, which highlighted Baby Boomers – those aged 58 to 76 – were spending at rates at least double that of other generations.
The top four spending categories for Baby Boomers in that analysis were the same categories that showed growth year-on-year for this month’s Spend Trends data, indicating the growth was likely attributed to that cohort.
The spending capacity of older Australians has largely been unaffected by rises in cost-of-living and inflation, with the demographic more likely to benefit from increased deposit rates and to have paid off their mortgage.
The month-on-month data showed the sectors in which Western Australians were tightening spending, including on necessities such as Utilities (-3% value; -2% volume), Pharmacies (-1%; -3%), and Food Stores (-1%; -2%).
Consumers also appeared to be using their vehicles less frequently and paying less at the bowser as a result, with the volume of transactions declining 11 per cent year-on-year, and the value falling at a similar rate (-10%).
A silver lining in the data showed the year-on-year difference between transaction value (3%) and volume (3%), which has been an indicator of cost-of-living pressures, hit parity, suggesting the imbalance continued to ease.
That imbalance remained most prevalent in Electrical Appliance retailers, which grew in value of spend by 32 per cent, but contracted in volume (-2%), indicating customers were paying significantly more, despite shopping less.
Bankwest General Manager Everyday Banking Philippa Costanzo said: “Western Australians are facing a number of financial headwinds, particularly homeowners, which is resulting in many having to find budget savings.
“We can see from these figures that the majority of the community is tightening spending across the board, be that on essentials or discretionary sectors, but we can also see there is a cohort that continues to be less affected.
“It’s good to see the year-on-year difference between volume and value growth returning to parity, as that suggests Western Australians are not forking out more for less, especially on essentials at the supermarket.
“However, even as the cost-of-living squeeze slows, we expect challenging economic conditions to remain for at least the short-term future, and I encourage any customers in difficult circumstances to get in touch with us."