Strong retail spending and a strong job market has set Victoria up as the best performing economy in the nation , unseating Tasmania which has held the crown for the past nine consecutive quarters. The ACT has jumped from equal fifth spot to second on the back of increased equipment investment and Tasmania is now ranked third. 

In terms of overall economic growth, Western Australia is the clear leader in large part to a strong resources sector. Economic activity in Western Australia was more than 35% above the decade average. The NT came in second with economic activity up 28.1% on normal and Tasmania was third with a 27.9% rise. South Australia trailed the pack with a 19.9% rise in economic activity above the decade average.

CommSec Chief Economist Craig James said that despite the change in the leader board, very little separates the top four economies. “When looking at annual growth to get a guide on economic momentum, Queensland had annual growth rates that exceeded the national average on all eight of the indicators,” James said.

The CommSec State of the States report uses the latest available information to provide an economic snapshot of each region by comparing annual growth rates for eight key indicators including: economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance and dwelling commencements.

Growth across a variety of sectors

Victoria has the strongest job market in the country with an unemployment rate at a record low of 3.2%, that’s 43.2% below the decade-average. Next best is WA, with its jobless rate near a 13 ½-year low of 3.4%, and down 38% on the decade average.

In the year to June, Queensland saw the biggest growth in employment with jobs up by 4.6%, followed by WA which was up 4.2%. Low unemployment drives demand for consumer goods and thus overall retail spending.

South Australia is strongest in relative construction work while Queensland remains the leader in relative population growth despite strict border and immigration controls through the COVID pandemic.

Infographic illustrating Australian economic insights July 2022 Infographic illustrating insights from the State of the States report July 2022.

Housing finance continued to be an area of growth for most states and territories, with new commitments in all economies above decade-long averages. The ACT reported housing finance commitments more than 70% higher than seasonally adjusted averages for the past decade.

Home prices continued to grow before the announcement of several rate rises – up 11.2% nationally – but at a slower rate than in recent years. Inflation is also weighing on all state economies with the highest figure reported in Perth at 7.6%.

Wages haven’t kept pace with inflation, however, with national wage growth at 2.4%. Wage growth was the strongest in Tasmania and the ACT at 2.8%.

Looking to the future

There is significant momentum in Queensland’s economy with both growth rates and the population to handle new roles being brought to market. “In terms of future economic performance, much will depend on how economies are affected by growing COVID-19 case numbers and also how they respond to a period of rising interest rates,” said James.

  1. Victoria
    Strength: Retail spending
    Weakness: Relative population growth
  2. ACT
    Strength: Equipment investment
    Weakness: Relative unemployment
  3. Tasmania
    Strength: Equipment investment
    Weakness: Housing finance
  4. Queensland
    Strength: Relative population growth
    Weakness: Equipment investment
  5. Western Australia
    Strength: Relative economic growth
    Weakness: Housing finance
  6. South Australia
    Strength: Construction work done
    Weakness: Relative economic growth
  7. New South Wales
    Strength: Relative unemployment
    Weakness: Equipment investment
  8. Northern Territory
    Strength: Relative economic growth
    Weakness: Dwelling starts

Read the full CommSec report

Download summary

July 2022 - State of the States overview

Plus, you’ll find more articles on the economy at CommBank ForesightTM, insights for future-facing businesses. 

About the CommSec State of the States Report

The State of the States report uses the most recent economic data available, however while some data relates to the March quarter, other data – such as unemployment – is timelier, covering the month of June.

CommSec, the digital broking arm of Australia’s largest bank, assesses the performance of each state and territory on a quarterly basis using eight key indicators. Those indicators include: economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance, and dwelling commencements.

Just as the Reserve Bank uses long-term averages to determine the level of "normal" interest rates, CommSec compares the key indicators to decade averages; that is, against "normal" performance. CommSec also compares annual growth rates for eight key indicators for all states and territories, in addition to Australia as a whole, enabling a comparison of economic momentum.

Things you should know

  • This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. You should consider seeking independent financial advice before making any decision based on this information. The information in this article and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of its publication but no representation or warranty, either expressed or implied, is made or provided as to the accuracy, reliability or completeness of any statement made in this article . Commonwealth Bank of Australia ABN 48 123 123 124. AFSL and Australian Credit Licence 234945.

    The links within this article will bring you to a third party website, owned and operated by an independent party over which CBA has no control ("3rd Party Website"). Any link you make to or from the 3rd Party Website will be at your own risk. Any use of the 3rd Party Website will be subject to and any information you provide will be governed by the terms of the 3rd Party Website, including those relating to confidentiality, data privacy and security.