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  • WA consumer sentiment down


    WA consumer sentiment down - reiwa.comFollowing a large jump in November, consumer sentiment in Western Australia fell 23.4 per cent in December 2015, as the effect of positive economic growth data was reversed by announcements of future job cuts and anticipated weaker mining conditions.

    All five index components experienced substantial declines over November, mainly to market adjustments following a spike in confidence last month.

    Both long and short term expectations for economic conditions decreased the most, despite positive news on economic growth, down 26.6 per cent and 35 per cent respectively.

    Contrary to the negative sentiment expressed, economic growth in WA for 2014-15 was one of the strongest of all major states – up 3.5 per cent over the year, behind Northern Territory (10.5 per cent) which is still at its developing phase.

    On the other hand, labour market conditions remain weak, on the back of job cuts in the manufacturing and mining industries. As a result, the unemployment rate rose over November to 6.6 per cent (up from a seasonally adjusted 6.5 per cent in October).

    Although iron ore prices have been at all-time lows, there has been significant improvement in both industrial and precious metal sectors.

    The gradual recovery of iron ore, which rallied six per cent over the week to 22 December 2015, was due in part to fiscal policy announcements from China (which take effect in 2016).

    While mining conditions are expected to remain somewhat soft, the more positive outlook for iron ore prices and consumer affordability should keep confidence in positive territory over the next few months, before planned job cuts fall through.

                                                Index Western Australia National
    Current month (Dec-15) 80.2 100.8
    Previous month (Nov-15) 104.7 101.7
    Previous year (Dec-14) 67.7 91.1
    Five years ago (Dec-10) 119.8 111.0
    Month change -23.4 -0.9%
    Year change 18.5% 10.6%