The cost-of-living squeeze has shown signs of easing for the first time in the past financial year – this as the start of the new school year sparked a spending boom.
This was according to Bankwest’s Spend Trends report for February, which tracked WA customer credit and debit activity.
Bankwest’s monthly Spend Trends analysis showed a 3% rise in the average value of transactions month-on-month, which was far less than 30% increase in both the number of customers spending, and the volume of transactions.
The result was the complete opposite of the Spend Trends data from the past few months, which generally showed transaction value outpacing volume, indicating Western Australians were paying more for less.
Electrical appliances, which have consistently led the cost increases, softened to a 42% gap between transaction value and volume growth year-on-year – a significant change compared to January’s 62%.
Despite cost-of-living impacts, month-on-month spending also grew across almost every sector in the number of customers transacting and the volume of transactions, with the exception of sporting and toy stores, which dropped -11% month-on-month in the volume of transactions.
The catalyst for this growth was the return to school, with education accounting for a significant portion of the increases, as a runaway leader in both month-on-month customer (160%) and transaction volume (197%) growth.
Travel Agencies, meanwhile, continued to recover, leading the month-on-month (15%) and year-on-year (56%) growth in transaction value, while month-on-month transaction volumes increased by 38%.
The end-of-school holidays also prompted month-on-month declines in the transaction value of some tourism-related sectors, led by auto rental (-12%) and restaurants and bars.
“Western Australians have consistently adapted to the challenges of uncertainty over the past few years and we’re seeing them do so again,” said Philippa Costanzo (pictured above), Bankwest general manager everyday banking. “These results might appear contradictory, as spending has increased despite rising cost of living, but January tends to be a slower month after the Christmas rush, so some month-on-month increases would be expected.
“This month’s Spend Trends figures show the closing gap between transaction value and volume, with volume outpacing value year-on-year for most sectors for the first time since we started looking at cost-of-living last May.
“However, it’s difficult to assess where spending is at, given the impacts of COVID restrictions making year-on-year comparisons challenging, so we might be seeing a return to normal, as opposed to a defiance of cost-of-living.”
Costanzo said the bank expects challenging economic conditions to remain for some time.
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