CommSec State of the States – October 2017


Overall Results

  • How are Australia’s states and territories performing? Each quarter CommSec attempts to find out by analysing eight key indicators: economic growth; retail spending; business 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.
  • The State of the States report also includes a section comparing annual growth rates for the eight key indicators across the states and territories as well as Australia as a whole. This enables another point of comparison – in terms of economic momentum.
  • The latest data shows Australia’s economies to be in good shape but with some differences in relative performance. NSW remains on top while Victoria is not far behind, ahead of the ACT. Then there is a gap to South Australia, Tasmania, Queensland and Northern Territory, then another gap to Western Australia.
  • NSW has retained the position as the best performing economy, at or near the top of all indicators.
  • Victoria holds second spot on the economic performance rankings with strength provided by high population growth, boosting housing demand.
  • The ACT retains third spot on the performance rankings but there has been a softening in the job market.
  • South Australia has lifted from sixth to fourth spot, just ahead of Tasmania and Queensland.
  • Northern Territory remains in seventh position.
  • Western Australia continues to lag other economies and annual growth rates remain below national averages on seven of eight indicators surveyed.
    Looking Ahead
  •  NSW remains on top of the economic performance rankings but Victoria has narrowed the gap. Both states have relatively high population growth, underpinning home building and retail spending.
  • Victoria remains in second on the performance rankings and has lifted in four of the eight indicators as well as out-performing all other economies on annual growth rates.
  • The ACT remains in third spot but it has lost economic momentum with the jobless rate edging higher while experiencing a slowdown in new home building.
  • NSW, Victoria and ACT still represent the top-tier of economies. There is still little to separate South Australia, Tasmania, Queensland, and Northern Territory.
  • South Australia lifts from sixth to fourth with improvement in the job market serving to boost retail spending and new home starts.
  • Tasmania slips from fourth spot to fifth with some softening in the relative position on retail spending and overall construction work done.
  • Queensland has slipped to sixth but as noted there is little to separate it from Tasmania and South Australia. Queensland employment is now the strongest in the nation. The state is also still being buoyed by strong export activity.
  • The Northern Territory remains in seventh spot. The outlook for the Northern Territory is constrained by weak population growth.
  • Western Australia is benefitting from stronger employment growth – the 2.9 per cent annual growth rate now the best in 4½ years. The stronger job market has potential to lift retail and housing activity.


  • Each of the states and territory economies were assessed on eight key indicators: economic growth; retail spending; business investment; unemployment, construction work done; population growth; housing finance and dwelling commencements.
  • The aim is to find how each economy is performing compared with “normal”. And just like the Reserve Bank does with interest rates, we used decade-averages to judge the “normal” state of affairs. For each economy, the latest level of the indicator – such as retail spending or economic growth – was compared with the decade average.
  • While we also looked at the current pace of growth to assess economic momentum, it may yield perverse results to judge performance. For instance retail spending may be up sharply on a year ago but from depressed levels. Overall spending may still be well below “normal”. And clearly some states such as Queensland and Western Australia traditionally have had faster economic growth rates due to historically faster population growth. So the best way to assess economic performance is to look at each indicator in relation to what would be considered ‘normal’ for that state or territory.
  • For instance, the trend jobless rate in the ACT of 4.4 per cent is the second lowest of all economies. But this jobless rate is 16.9 per cent higher than its ‘normal’ or decade-average rate. In contrast, NSW’s unemployment rate is actually 10.1 per cent below its decade average, putting it ahead of the ACT on this indicator.
  • Trend measures of the economic indicators were used to assess performance rather than more volatile seasonally adjusted or original estimates.

Read the report.

You must be logged in to post or view comments.