Inflation outlook dimmer for consumers

Almost a third of Western Australians think inflation won’t ease for at least two years, but they’re still more confident than five years ago.

Consumers are less confident in the September quarter than they had been in the three months to June, according to the Chamber of Commerce and Industry of WA.

But confidence is still higher than much of the past decade, and about 11 per cent stronger than five years ago.

Good employment prospects and the state government’s performance both contributed positively to consumer sentiment.

Rising interest rates and high inflation were negatives.

About 51 per cent of consumers believed inflation pressure will ease within two years, while 30 per cent expected prices to continue to rise.

That indicates that expectations of inflation remaining high are growing, which the Reserve Bank of Australia has sought to avoid with a rapid tightening of interest rates.

In Perth, inflation hit 7.4 per cent in the year to June.

Chamber chief economist Aaron Morey said consumers were becoming more circumspect in spending and choice of brands.

“Weaker economic conditions are anticipated by around one in four WA households, both in the short term (26 per cent) and looking out to the next 12 months (29 per cent),” Mr Morey said. 

“One in three WA households anticipate the economy will improve in the coming year (36 per cent), down 6 points. “

He said Western Australians had strongly backed cuts to payroll tax, with about 65 per cent saying it was unfair for local businesses to face a higher burden than other states.