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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.

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.

State of the States

Brought to you by the CommSec Economics Team

NSW & Victoria now share the honour of the best performing Australian economy, while the ACT is not far back in third spot. Tasmania is in fourth spot. Then there is a gap to South Australia and Queensland; along with another gap to Western Australia and the Northern Territory. NSW and Victoria benefit from solid population growth and strong job markets, driving retail spending and business investment.

The ACT retains third spot on the performance rankings with strength, due to the building and purchase of new homes. Tasmania is in fourth spot with a lift in population growth, driving new home construction and business investment. South Australia is now in fifth spot ahead of Queensland, with the former retaining its position courtesy of firm business investment, and construction work. Western Australia is now in seventh position just ahead of Northern Territory.

State & Territory breakdown

 

1. Victoria

Strength: Job Market 

Weakness: Equipment Investment  

 

Insights into VIC

Victoria remains at the top of the economic performance rankings, but is joined in top spot by NSW. Victoria ranks first on economic growth, retail trade, unemployment and construction work done. Victoria’s lowest ranking is fifth on business investment.

 

1. New South Wales

Strength: Retail Trade 

Weakness: Housing Finance

 

Insights into NSW

NSW shares top position on the overall economic performance rankings. NSW is consistently strong across the indicators and is second-ranked on six of the eight indicators.

 

3. ACT

Strength: Housing Finance

Weakness: Equipment Investment 

 

Insights into ACT

The ACT is in third spot in the rankings and has edged closer to Victoria and NSW. The ACT is top-ranked on housing finance and dwelling starts, and is second ranked on relative population growth.

 

4. Tasmania 

Strength: Population Growth 

Weakness: Economic Growth

 

Insights into TAS

Tasmania is in fourth position on the economic performance rankings. Tasmania is ranked first on relative population growth and business investment, and is in second spot on housing finance.

 

5. South Australia

Strength: Equipment Spending

Weakness: Population Growth

 

Insights into SA

South Australia retains fifth position on the performance rankings ahead of Queensland. South Australia is third-ranked on business investment and overall construction work done. However, South Australia is sixth on three indicators.

 

6. Queensland

Strength: Dwelling Starts

Weakness: Job Market

Insights into QLD

Queensland retains sixth position. The key area of strength is new dwelling starts (third ranked,) but is seventh on business investment.

 

7. Western Australia

Strength: Equipment Spending 

Weakness: Job Market 

 

Insights into WA

Western Australia is seventh or eighth on all indicators except equipment spending (sixth). In fact equipment spending has been growing in annual terms for 18 months.

 

8. Northern Territory 

Strength: Economic Growth  

Weakness: Population Growth

 

Insights into NT

The Northern Territory is third-ranked on economic growth. But it lags all other states and territories on six of the indicators.

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