State of the States October 2014
How are Australia’s states and territories performing? Each quarter CommSec attempts to find out by analysing eight key indicators: 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; we have done the same with key economic indicators. For each state and territory, latest readings for the key indicators were compared with decade averages – that is, against the “normal” performance.
And for the first time since the July 2011 report, there is a new leader at the top of Australia’s economic performance rankings: NSW.
However it is close at the top of the rankings with NSW ahead of Western Australia (previously the top-ranked economy) and Northern Territory.
The next grouping is Victoria and Queensland followed by South Australia, the ACT and Tasmania.
While NSW is the big improver, up from third to first, the ACT economy has moved from a grouping with Victoria and Queensland to the third tier of state and territory economies.
NSW is top of rankings on population growth and dwelling starts and second on retail trade, business investment and unemployment. NSW is also third on housing finance and fourth on overall construction work and economic growth.
Western Australia has lost ground on retail trade, equipment investment and population growth – a consequence of the fading of the mining boom. But Western Australia is still best performing on housing finance – the new economic driver.
The Northern Territory is now the third best performing economy. In fact the NT is top on five indicators with low unemployment and equipment investment driving growth. But it is also third on dwelling starts, sixth on population growth and eighth on housing finance.
There is little to separate Victoria and Queensland on the economic performance rankings.
Victoria continues to record solid population growth compared with its decade average, thus sustaining home purchase and construction. But commercial and engineering activity and engineering investment are both fifth ranked of the states and territories.
By contrast, the key strengths of the Queensland economy are non-residential building and business investment (both third ranked). But relative high unemployment is holding back momentum.
South Australia is now above the ACT in the performance rankings. South Australia is generally ranked sixth to eighth on the key indicators but is third ranked on unemployment and population growth.
The ACT economy is supported by housing finance but rising unemployment has affected growth of consumer spending and business investment.
Tasmania remains at the bottom of the Australian economic performance table. Tasmania is seventh or eighth on six of the economic indicators although it currently is has the second strongest annual growth rate of retail spending of the states and territories.
Click here to read the full report.
