CommSec State of the States – January 2021


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; 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 the economic indicators. For each state and territory, latest readings for the key indicators were compared with decade averages – that is, against the “normal” performance.
  • Now in its 12th year, 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 fourth quarter in a row, Tasmania holds the mantle of the best performing economy. But notably there has been compression in the rankings with little to separate five of the other seven economies.
  • The ACT remains in second spot, ahead of South Australia, in equal third spot with Victoria.   Queensland is in fifth spot. NSW and Western Australia are just behind in joint sixth spot from the Northern Territory.
  • As noted above, Tasmania has now been on top for four straight surveys – either shared with another economy or in its own right.
  • The second ranking for the ACT maintains its highest ranking for over three years (April 2017).
  • And the joint third ranking for South Australia is its highest position in just over a decade.
  • The equal sixth ranking for NSW is its lowest position for eight years.


  • In the overall rankings, the big improvers over the past quarter were Queensland, South Australia and Western Australia. The biggest losers were Victoria and the ACT. But the key result was the compression in the rankings.
  • Over the quarter Tasmania lost three places on housing finance but improved one place on construction work done and relative unemployment.
  • The ACT fell three places on dwelling starts and either rose or fell one place on each of six of the other indicators.
  • Victoria fell on housing finance and retail trade (three places on each indicator) and one place on relative unemployment and equipment spending.
  • South Australia gained two places on dwelling starts, and one spot on four indicators. But SA fell two places on retail trade.
  • Queensland gained four places on housing finance, three places on equipment spending and one place on dwelling starts while losing one place on retail trade.
  • NSW fell three places on equipment investment and one spot on construction work. But NSW lifted two spots on relative unemployment and retail trade and one place on housing finance.
  • Western Australia improved two places on relative unemployment and retail trade and one place on equipment investment. But it fell one place on relative economic growth.
  • Northern Territory fell six places on relative unemployment but gained one place on retail trade.


  • 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 seasonally adjusted jobless rate in Victoria was 6.5 per cent in December with the jobless rate at 7.0 per cent in Tasmania. However Tasmania’s unemployment rate is 7.6 per cent above its decade average, while the Victorian rate is 13.8 per cent above its decade average. So Tasmania ranks above Victoria on this indicator.
  • Except for economic growth, seasonally adjusted or trend measures of the economic indicators were used to assess performance on all measures. While preference was for trend measures, in many cases these have been suspended in the wake of the COVID-19 crisis. Rolling annual nominal data was used to assess economic growth.

Read the full report.

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