New South Wales remains the best performing economy across all states and territories, according to the latest State of the States Report released by CommSec today.
Each quarter, the online broker arm of Australia’s largest bank assesses how each state and territory is performing on eight economic indicators.
New South Wales has held onto the position of best performing economy, and sits at or near the top of all of the key economic indicators used for the rankings.
The ACT has risen to second place, while Victoria drops to third in the overall rankings although little separates them.
CommSec Chief Economist Craig James said: “The latest data indicates a multi-speed national economy. New South Wales is solidly on top with little to separate the ACT and Victoria. Then there is a gap to Tasmania, Queensland, Northern Territory and South Australia then another gap to Western Australia.”
The report compared states and territories for the past quarter on economic growth, retail spending, business investment, unemployment, construction work done, population growth, housing finance and dwelling commencements.
In addition to economic performance the report also considers economic momentum and growth. A state or territory may have been under-performing, but if annual growth is rising, then this suggests that performance has scope to improve.
When looking across growth rates for the states and territories, the ACT doesn’t under-perform the national average on any indicator. At the other end of the scale, Western Australia has annual growth rates below the national average on all eight indicators while the Northern Territory underperforms on seven.
Findings on each state include:
1. New South Wales
New South Wales has retained its top rankings on business investment, retail trade and dwelling starts. The state is in second spot on unemployment, construction work and economic growth. New South Wales is in third spot on housing finance and unemployment.
“New South Wales, the ACT and Victoria represent the top-tier of economies, but there is little to separate them from one another. Last quarter we said that New South Wales may experience a challenge from either Victoria or the ACT over the coming year. And that remains the case,” James said.
2. Australian Capital Territory
The ACT has lifted to second place and is now top-ranked on housing finance. The ACT is second on business investment and population growth, and third on another three indicators.
“Economic momentum is on its side with firmer population growth, low unemployment and solid residential and engineering work,” said James.
3. Victoria
Victoria has eased to third spot on the economic performance rankings but there is little to separate the state from the ACT. The state leads the nation on population growth, and has eased its relative position on business investment and housing finance.
“Victoria has fallen to third place in the rankings, and there is little to separate it from the performance of the ACT over the past quarter. Victoria continues to lead the nation on population growth and employment growth has lifted,” said James.
4. Tasmania
Tasmania remains in fourth spot after climbing last quarter, and there is little to separate it from Queensland, Northern Territory and South Australia. Tasmania is now in second spot on unemployment.
“Tasmania remains in fourth spot with rising population growth – the fastest in five years – boosting housing demand and supporting the job market. Interestingly Tasmania is now ranked
second on unemployment as its 5.8 per cent jobless rate is 5 per cent below the “normal” – decade-average – of 6.1 per cent,” said James.
5. Queensland
Queensland remains in fifth position on the economic performance rankings. The state is benefiting from strong export growth which will boost overall growth of Gross State Product (economic growth). Exports are growing at a 43 per cent annual rate.
“Queensland is in fifth position, but there is little to separate the state from Tasmania, Northern Territory and South Australia. Tourism, exports and housing activity are driving the economy. Post-flood rebuilding and repairs can also be expected,” said James.
6. Northern Territory
The Northern Territory remains in sixth position on the economic performance rankings. The Territory is still ranked first on construction work done and unemployment and now also top-ranked on economic growth. But on forward-looking indicators like population growth, housing finance and home starts, the Territory lags other economies.
“The Northern Territory remains in sixth position on the performance rankings. The job market is strong but population growth is weak, affecting consumer spending and housing demand,” said James.
7. South Australia
The South Australian economy is in seventh position. South Australia is middle-ranked on business investment and fifth-ranked on dwelling starts.
“The South Australian economy retains potential to lift over the coming year. Employment is growing at close to the fastest annual rate in almost six years, lifting retail spending,” said James.
8. Western Australia
The economic performance of Western Australia continues to reflect the ending of the mining construction boom. But unemployment has eased over the last three months.
“Western Australia is benefitting from higher mining and metal prices and record export volumes. Unemployment has also eased over the past three months. Tourism and agriculture both provide scope to drive growth,” said James.