Western Australians’ spending plummeted in the first month of the new year, with Bankwest’s Spend Trends data showing significant declines across the board as record inflationary pressures compound a Christmas comedown.
Bankwest’s Spend Trends report for January tracked WA customer credit and debit transactions to provide insights into the community response to changing economic conditions, with the data showing dramatic spending declines.
The number of customers transacting, and the volume of transactions both significantly fell month-on-month (-31% and -33%) and year-on-year (-24% and -16%), while the value of transactions grew in both cases (+1% and +25%).
The results aligned with CBA’s Retail Trade analysis for December, which showed WA’s decline in spending of 4.7 per cent the sharpest in the country, while quarter-on-quarter inflation figures again had WA leading at 3.6 per cent.
The financial headwinds have combined with cost-of-living pressures to constrict spending across the board, with every sector declining month-on-month in the number of customers transacting, and the volume of transactions.
Year-on-year data was similar, with only a handful of sectors – mostly those related to the travel sector, which were coming off a low base – experiencing growth of any sort across the past 12 months.
The biggest declines month-on-month occurred in sectors that could be considered discretionary, with Discount Stores leading the fall in both value (-23%) and volume (-60%), with Department Stores (-11% and -49%) similar.
Electrical Appliances experienced another month of declining trade, with the number of customers transacting down 42 per cent, and the volume of transactions falling 46 per cent.
The sector’s dependence on international supply chains and its susceptibility to international value fluctuations has resulted in it not featuring in a Top 5 growth category in Bankwest’s Spend Trends since May-to-June 2022.
Electrical Appliances also lead all sectors in signs of inflation and price rises, with year-on-year transaction value growth (34%) significantly outpacing volumes, which declined by 28 per cent – a difference of 62 per cent.
Other sectors to show significant differences between transaction value and volume included Hotel/Motel (+66% value; +6% volume), Department Stores (+3%; -25%), Vehicles (+4%; -24%), and Service Stations (+8%; -19%).
The only sector to grow by volume month-on-month was Airlines, while the travel industry accounted for all the growth sectors year-on-year, with the figures an unreliable indicator of growth, given COVID impacts on turnover.
Bankwest General Manager Everyday Banking Philippa Costanzo said: “It’s clear from January’s Spend Trends data that Western Australians are feeling the impact of inflation and cost-of-living pressures.
“Spending is tightening across the board, with customers clearly prioritising purchasing choices, which is evident in the significant declines month-on-month and year-on-year in the number of customers transacting and how often.
“Recent figures have shown the continuing growth in inflation, with nation-leading growth in Western Australia, and it’s perhaps no surprise to now be seeing the real-world effect that is having on consumers.
“We expect challenging economic conditions to be around for some time and we urge any customers experiencing financial difficulties to get in touch with us as soon as possible, so we can work with them to provide support.”