The latest Bankwest Spend Trends Report has revealed the extent of the financial pressures on Western Australians, with spending plummeting across the board – including in sectors considered essential.
Bankwest’s Spend Trends report for March tracked WA customer credit and debit activity to provide insights into the community response to economic conditions, with year-on-year data showing essential sector declines.
That data showed, when comparing March 2023 to March 2022, sharp falls in customer and transaction volumes in sectors such as Food Stores/Warehouses (-21%, -18%), Pharmacies (-21%, -25%) and Utilities (-21%, -22%).
The year-on-year declines come despite Level 2 COVID health measures, which included venue and patron capacity limits, not easing until 31 March 2022, meaning that last year’s already-low spending volumes have fallen further.
The analysis also showed the number of customers transacting month-on-month was down 22 per cent, while the volume of transactions tumbled 20 per cent, with no sector in either category experiencing growth for the period.
The results indicated a significant pull-back on spending from consumers as cost-of-living and inflationary pressures combine to create a challenging financial environment, with the value of transactions proving telling.
Only six of 25 sectors declined in the value of transactions month-on-month, despite all 25 falling in customer and transaction volumes, with increases in essential sectors such as Utilities (7%), and Food Stores/Warehouses (3%).
The year-on-year data was equally telling, with the number of customers transacting growing in only three sectors – Travel Agencies (23%), Airlines (9%), and Other Transport (2%) – which was expected, given travel normalising.
Year-on-year transaction volume growth was equally predictable against the travel impacts of 2022, with Travel Agencies (46%), Other Transport (32%), Airlines (26%), Hotel/Motel (17%), and Auto Rental (6%) the only increases.
However, despite the limited growth in customer and transaction volumes, transaction values across the year grew in more than 60 per cent of sectors, a stark illustration of effects of inflation and cost-of-living pressures.
The transaction value growth was led by Hotel/Motel (53%), Electrical Appliances (37%) and Other Transport (30%).
Increasing costs forced Western Australians to pull back in essential (aforementioned) and non-essential sectors.
Non-discretionary sectors were sacrificed in the search for savings, with sharp falls year-on-year in customer and transaction volumes for the likes of Electrical Appliance retailers (-47%, -28%) and Department Stores (-35%, -32%).
Bankwest General Manager Philippa Costanzo said: “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.
“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 times, and I encourage any customers experiencing financial difficulty – or concerned they might in the future – to contact us as soon as possible."
