Western Australians have been forced to sacrifice essentials as they grapple with cost-of-living pressures, according to the latest Bankwest report.
Bankwest’s Spend Trends Report for March, which tracked WA customer credit and debit activity to provide insights into the community response to economic conditions, showed spending tumbling across the board – including in sectors considered essential.
When comparing March 2023 to March last year, customer and transaction volumes plunged in sectors such as food stores/warehouses (-21%, -18%), pharmacies (-21%, -25%), and utilities.
Considering that Level 2 COVID health measures, which included venue and patron capacity limits, did not ease in March 2022, it meant that last year’s already-low spending volumes have dropped even further.
The number of customers transacting month-on-month fell 22%, while the volume of transactions tumbled 20%, the analysis also showed.
The results indicated a significant pull-back on consumer spending as the combination of cost-of-living and inflationary pressures create a tough financial environment, with the value of transactions providing compelling evidence.
Of the 25 sectors, only six declined in the value of transactions month-on-month, despite all 25 falling in customer and transaction volumes, with rises in essential sectors such as utilities (7%) and food stores/warehouses (3%).
The year-on-year data was equally telling. Only three sectors – travel agencies (23%), airlines (9%), and other transport (2%) – saw a growth in the number of customers transacting, which was expected, as travel normalised.
Year-on-year transaction volume growth was equally predictable against the travel impacts of 2022, with only the sectors of travel agencies (46%), other transport (32%), airlines (26%), hotel/motel (17%), and auto rental (6%) seeing increases.
But despite the limited growth in customer and transaction volumes, transaction values across the year rose in more than 60% of sectors, illustrating the impacts of inflation and cost-of-living pressures.
Hotel/motel (53%), electrical appliances (37%) and other transport (30%) led transaction value growth.
Surging costs also forced Western Australians to pull back in non-essential sectors to save more money, with sharp declines year-on-year in customer and transaction volumes for the likes of electrical appliance retailers (-47%, -28%) and department stores (-35%, -32%).
“The current economic climate is having inflationary and cost-of-living pressures combining to force Western Australians to make choices on where they spend their money,” said Philippa Costanzo (pictured above), Bankwest general manager.
“The Spend Trends data shows us that these choices are quite significant and across the board, with the year-on-year declines, particularly in sectors that would be considered essential, suggesting money is tight for many.
“The few areas that have experienced growth in value year-on-year are relatively predictable, such as travel sectors with the normalising of that industry, and the housing market could also be contributing to Hotel/Motel increases.
“We expect challenging economic conditions to be around for some time, and I encourage any customers experiencing financial difficulty – or concerned they might in the future – to contact us as soon as possible.”
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