CommSec State of the States – April 2018


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 there are broad differences in relative performance. NSW remains on top of the economic performance rankings but Victoria has closed the gap. In the second group is ACT and Tasmania. The third group is South Australia and Queensland. And then there is a gap to the Northern Territory and Western Australia.
  • NSW remains at or near the top of most indicators.
  • Victoria holds second spot on the economic performance rankings with strength provided by high population growth and improvement in the job market
  • The ACT retains third spot on the performance rankings ahead of Tasmania which is benefitting from faster population growth.
  • South Australia is in fifth spot ahead of Queensland. Queensland job growth is the fastest in the nation.
  • Northern Territory remains in seventh position just ahead of Western Australia. Stronger export activity in both economies is boosting incomes.

Looking Ahead

  • NSW remains on top of the economic performance rankings, just ahead of Victoria. Both states have relatively high population growth, underpinning home building and retail spending.
  • Victoria modestly closed the gap with NSW on the performance rankings with the job market improving over the past quarter. When assessing annual growth rates, Victoria exceeded the national-average on six of the eight indicators.
  • The ACT remains in third spot with improvement in equipment investment and construction work over the past three months.
  • Tasmania remains in fourth position, courtesy of firmer equipment investment and a further lift in population growth – now the strongest in seven years.
  • South Australia remains in fifth spot on the performance ranking. Construction work done is at record highs and work levels are over 19 per cent higher than a year ago.
  • Queensland remains in sixth position. But Queensland continues to lead the way on employment growth and population growth is at 4-year highs. 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 and falling employment but new projects provide scope to support economic activity.
  • There are positive prospects for the Western Australia economy. Real estate professionals believe that the residential market has bottomed. In addition, exports are rising solidly and equipment investment has lifted to near 3-year highs.


  • Each of the states and territory economies were assessed on eight key indicators: economic growth; retail spending; equipment 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 Northern Territory of 3.9 per cent is the lowest of all economies. But this jobless rate is 1.5 per cent higher than its ‘normal’ or decade-average rate. However NSW’s unemployment rate is actually 8.3 per cent below its decade average, putting it ahead of the Northern Territory on this indicator.
  • Trend measures of the economic indicators were used to assess performance on all measures except economic growth rather than more volatile seasonally adjusted or original estimates. Rolling annual nominal data was used to assess economic growth.

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