CommSec’s most recent State of the States report has found that the ACT has had the stand-out economy over the past quarter, while WA has slipped back.

 

The ACT continues to enjoy low unemployment and housing activity, construction, population growth and economic growth all above average. Its weaknesses are retail spending and business investment.

 

The Western Australian economy continues to be driven by construction work but population growth has slowed, dragging on the housing sector. Unemployment is low compared with other states but it has been drifting higher.

 

The report finds little to separate Victoria, South Australia, Northern Territory, Tasmania and NSW. NSW has been a major improver over the last quarter led by above-average population growth and firmer business investment, both the Queensland and NSW economies suffer from weak housing markets. They are the only two economies where dwelling starts are below decade averages.

 

Other findings include:

  • The Victorian economy has the strongest housing market of the state economies. In fact dwelling starts are 20 per cent above decade averages while housing lending continues to grow, in contrast to the other states. The area of relative weakness is the job market where Victorian unemployment is slightly above decade averages, in contrast to other states where it is lower.
  • The South Australian economy is supported by historically-high population growth, underpinning activity across a number of sectors. Overall construction work is almost 47 per cent above decade averages, with current annual growth second only to the ACT, up 20 per cent.
  • The relatively-small Northern Territory economy continues to be under-pinned by very low unemployment together with firm retail spending. The unemployment rate of 3.1 per cent remains well below the 4.9 per cent decade average. The areas of under-performance are construction work, which has slowed markedly since early 2009, and housing finance.
  • The performance of the NSW economy continues to be restrained by the construction sector – both new home building as well as commercial and engineering activity. But high population growth relative to decade averages points to the need to build more homes in coming quarters. Business investment in equipment & machinery is strongest in NSW of the states & territories – either compared with “normal” levels or annual growth rates.
  • In Tasmania the areas of strength are relatively-low unemployment and above-average dwelling starts while retail spending and business investment tend to lag behind other states and territories.
  • The performance of the Queensland economy continues to be hampered by historically-low population growth, affecting building and construction activity. But business investment in plant & equipment is 28 per cent above longer-term averages and spending in the latest quarter was over 7 per cent higher than a year ago. Rebuilding activity following the floods will substantially boost construction activity in coming months.