The NSW economy remains the nation’s top performer, dominating the other states on key measures of prosperity, according to CommSec’s latest State of the States report, while Western Australia is anchored at the bottom of the list as the mining construction boom comes to an end.
Now the top state for two years, NSW ranks highest on business investment and retail trade, while housing construction is another key factor. CommSec chief economist Craig James said Victoria is breathing down its neck, though, after NSW slipped on employment and economic growth.
Population growth, retail sales and business investment are the main reasons for Victoria retaining second spot, and Mr James said its strong construction and housing markets have it poised to challenge NSW for top place.
3. AUSTRALIAN CAPITAL TERRITORY
Housing finance is the ACT’s strongest economic pillar, while it also performs well on economic growth and retail trade. “Stronger housing activity and the lift in business investment will support the job market and retail spending over the coming year,” Mr James said.
4. NORTHERN TERRITORY
The Territory is the nation’s best performer when it comes to economic growth, as well as construction and employment. But with resources projects nearing completion and population growth slowing, it faces some clear economic challenges, Mr James said.
5. SOUTH AUSTRALIA
SA comes in mid-table for almost all of the economic measures used by CommSec – economic growth, retail spending, business investment, unemployment; construction work, population growth, housing finance and dwelling commencements.
A rise in the construction of homes and a growing population helped Queensland hold its place on the rankings, and Mr James said tourism and agricultural exports will boost its performance in the coming months.
The only state to rise since CommSec’s last report three months ago, Tasmania showed improvement in population and the housing sector. “Population growth is close to the fastest annual pace seen in five years. Both home loans and home prices are lifting,” Mr James said.
8. WESTERN AUSTRALIA
The mining construction boom is over and WA has fallen to the bottom of the pile. Mr James says the state is in transition mode, and income levels will grow as mining exports rise.