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, the 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.
For the second consecutive quarterly survey Victoria and NSW share the title of the best performing economy.
The ACT is now in joint third position with Tasmania. Then there is a gap to South Australia and Queensland. And in the fourth grouping is Western Australia and the Northern Territory.
NSW and Victoria each benefit from solid population growth and strong job markets, driving retail spending and business investment.
The ACT is in now equal third spot on the performance rankings with strength in the building and purchase of homes.
Tasmania has joined the ACT in third spot with higher population growth driving new home purchase and business investment.
South Australia remains in fifth spot from Queensland and is ahead of the latter on five of the eight indicators.
Western Australia remains in seventh position just ahead of Northern Territory.
Looking Ahead
On the eight indicators used for comparison, NSW and Victoria are jointly at the top of the rankings. Both states have broad-based economic strength, underpinned by population growth, construction and investment activity. Strong job markets provide support for local economies but housing markets will continue to soften in the period ahead – both home building and home loans.
Over the quarter NSW lifted one place on relative population growth. But Victoria fell one place on two indicators and rose one place on two other indicators.
The ACT is joined by Tasmania in third spot on the performance rankings. The biggest move by the ACT on the individual indicator rankings was losing two spots on relative population growth and losing one position on business investment.
Tasmania is now in equal-third position. Tasmania gained two spots on relative economic growth and dwelling starts but lost two spots on the job market.
South Australia remains in fifth position in the rankings, improving its relative position on the job market but losing two spots on construction work.
Queensland is in sixth position in the performance rankings but it has been the big improver over the last quarter, narrowing the gap to South Australia. Queensland has lifted on three of the indicators and lost one spot.
Western Australia stays in seventh spot with the Northern Territory in eighth position. In both Western Australia and the Northern Territory exports are rising strongly. Rolling annual exports in Western Australia are up 17.7 per cent on a year ago with exports up 38.7 per cent in the Northern Territory.
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