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24 Oct 2011
Large variations have appeared in Australia’s state economies, dividing them into three clear groups, according to Commonwealth Securities' latest quarterly State of the States report.
The report analyses eight key indicators - economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance and dwelling commencements.
CommSec's chief economist, Craig James says Australia’s eight states and territories have divided into three rankings, with WA clearly the nation’s leading economy, followed by the ACT, Victoria and South Australia, with Tasmania, NSW, Northern Territory and Queensland trailing behind.
According to the report, the mining boom has helped Western Australia retain its economic lead ahead of the nation’s seven other jurisdictions, with an economic output now almost 29 per cent above the decade average. WA is ranked first among the states in economic growth and construction, second in retail trade, equipment investment and employment, while it under performed in the areas of population growth and housing finance.
At the opposite end of the scale, Queensland has been left behind in the economic stakes, ranking seventh alongside New South Wales. Despite the state’s significant resources sector, the CommSec report indicated Queensland was suffering from a “soft” tourism demand, a “slower pick-up in mining projects” and modest boost from population growth than other states.
Here’s how the other states performed according to CommSec:
- Slipping to second place in the rankings, the Australian Capital Territory continues to benefit from low unemployment and a strong housing market, although the ending of the Government tax break for small and medium sized businesses saw a scaling back of equipment investment.
- In third place, South Australia is the nation’s quiet achiever, with strong population growth underpinning solid commercial and engineering construction. However, a soft employment market continues to restrain momentum in the housing and retail sectors.
- The Northern Territory owes its fourth position to a strong jobs market, driving firm retail spending. Construction and investment can prove volatile but at present investment spending remains strong.
- Victoria is in fifth spot largely because historically-high population growth is generating strong housing demand and construction. But the country’s weakest jobs market has put a dampener on retail trade.
- In sixth place, Tasmania continues to be supported by resilience in dwelling construction with flow-on effects to retail spending. As has historically been the case, low population growth continues to be the state’s weak point, although equipment investment has also underperformed the mainland states.
- Equal last with Queensland, New South Wales recorded the lowest economic growth in the country. However, the light in the tunnel for New South Wales is firmer population growth, generating a solid pick-up in housing activity. And equipment investment in New South Wales is growing at the second fastest annual rate across
