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Spending by Western Australians plunged in the first month of the year as record-high inflation and cost-of-living pressures compounded a “Christmas comedown,” according to new data from Bankwest.
The Bankwest Spend Trends report for January revealed significant declines in the number of customers spending and the volume of transactions just as the value of transactions rose.
For the month of January, the number of customers transacting, and the volume of transactions were down 31% and 33% respectively. Year-on-year, these were down 24% and 16% respectively.
The value of transactions, meanwhile, increased 1% month-on-month and 25% year-on-year.
Bankwest general manager everyday banking Philippa Costanzo (pictured above) said the January data reflected how Western Australians are impacted by today’s economic conditions.
“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,” Costanzo said.
The results of Bankwest’s report are aligned with the Commonwealth Bank of Australia's Retail Trade analysis for December, which showed that WA’s 4.7% spending decline was the sharpest in the country, along with quarter-on-quarter inflation figures that had WA leading at 3.6%.
The spending decline in WA follows a pattern with previous Bankwest Spend Trends report showing a downturn.
Amid inflationary pressures, spending in WA fell across multiple sectors, according to the Bankwest report, with the biggest month-on-month declines occurring in discretionary sectors.
Discount stores led the fall in both value (23%) and volume (-60%), and department stores posted similar declines (11% and -49%).
Electrical appliances also experienced another month of declining trade as the number of customers transacting fell 42% and the volume of transactions dropped 46%, following the sector's dependence on international supply chains and its susceptibility to international value fluctuations.
Additionally, electrical appliances topped all sectors when it come to inflation and price rises as year-on-year transaction value grew 34% and significantly outpaced volumes that were down 28%, leading to a difference of 62%.
Other sectors that posted significant differences between transaction value and volume include hotels/motels (+66% value; +6% volume), department stores (+3%; -25%), vehicles (+4%; -24%), and service stations (+8%; -19%).
Out of all the sectors analysed in the Bankwest report, the only one to grow by volume month-on-month was airlines. The travel industry also accounted for all the growth sectors year-on-year, with a note from Bankwest stating that this could be an unreliable indicator of growth due to the impacts of COVID on turnover.
“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,” Costanzo said.
“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.”
