Cost-of-living pressures rise for WA consumers as growing pressures force decisions about where to cut back

Cost-of-living stresses among West Australians have jumped over the past three months but retirees remain the least worried about financial pressure, new data shows.

Amid growing speculation the Reserve Bank of Australia will hike interest rates to 4.35 per cent next month, new National Australia Bank data on Friday showed rising consumer stress as cost-of-living pressures become entrenched.

Job security is keeping a floor under consumer attitudes, the latest quarterly NAB survey on consumer sentiment showed, with a sharp fall in employment likely to force a significant adjustment in spending.

Those surveyed have a clear expectation the cost of necessities like groceries, transport, rent and mortgages will rise over the next year.

The data, based on a survey of about 2000 Australians over the three months to September, also shows the measures people are taking to cope with additional — and longer-running — cost pressures: cancelling or cutting back eating at restaurants (more than five in 10), pulling back on treats like coffee and snacks (one in two), trips in the car and visiting the cinema or theatre (nearly five in 10 each).

About four in 10 have cancelled, delayed or made more modest plans for holidays, cancelled or cut back food delivery like MenuLog and Uber Eats, and donations to charity, while about one in three have delayed or cancelled a big household purchase such as a TV or whitegoods, and subscription or streaming TV services.

“Australians continue to reprioritise spending according to what they value personally,” NAB personal banking group executive Rachel Slade said.

“There is no doubt the past 12 months have been tough, but we’ve seen Australians build their resilience and they are telling us they feel better prepared to adapt by re-prioritising their spending.”

According to NAB, 30 per cent of West Australians are living with very high cost-of-living pressures, just below the national level — but that has increased significantly by 11 percentage points since the end of 2020.

Severe stress nationally is being felt most by people aged 30 to 64, particularly among divorced people, renters and people with children.

Consumers also believe prices increased over the quarter for most products, particularly groceries, utilities and transport, including in WA. The perceptions were also consistent among lower and higher income people.

Two-thirds of people nationally expect prices to keep increasing over the next three months and the next year, with little differentiation at a State level.

Consumers are least likely to pull back or cut spending on private school fees, children’s hobbies and sport and spending on pets.

“A lower number of consumers over 65 ... cut back in all areas, except charitable giving,” the survey findings state.

“More consumers under the age of 50 also typically cut back more than those over 50.”

Women were more likely to pull back spending than men in all age brackets, the survey showed.

The biggest savings by cutting back were by 18-29 year olds, who the survey estimated would save $858 from cutting back holiday plans, while 50-64 year olds would save $772 from delaying or not making a major household purchase.

The rising cost of essentials is partly forcing the pullback in spending on bigger items, with buying major household items and home improvements most likely to be delayed or cancelled.

“Some people are facing tougher decisions than others and we know the cost of living isn’t being felt by everyone in the same way,” Ms Slade said. “But the economy is resilient, and Australians are broadly in good shape.”

Overall concern about the national economy among West Australians also jumped but is below the level in most other States and Territories. West Australians have a higher concern about the international economy than anywhere other than SA.