CommSec’s quarterly State of the State report has found that WA remains Australia’s best performing economy, ahead of the Northern Territory and both economies are likely to hold their top positions over 2013, underpinned by rising population growth.

Western Australia leads the way on construction work, retail trade, population growth, construction work done and equipment investment. It is second strongest on retail trade and housing finance and third strongest on unemployment and finished fifth on dwelling starts.

The ACT economy remains third with the main strengths being dwelling starts and population growth. But while unemployment is still lower than most states, it is well above “normal” for the ACT.

There is still little to separate the three largest states: Victoria, Queensland and NSW. Victoria is supported by its housing sector but is losing momentum. Queensland is strongest on construction work and equipment investment but its performance is restrained by a historically-high reading on unemployment. NSW benefits from having historically-low unemployment, and together with rising population growth, the factors are in place for a lift in housing activity in 2013.

There is a sizeable gap in the rankings to South Australia, although population growth in South Australia is rising and is well above its longer-term average, potentially boosting housing demand, non-residential and engineering investment and retail spending.

Tasmania remains at the bottom of the Australian economic performance table. lagging all other economies on four of the eight indicators: overall economic growth, retail trade, population growth and construction work done. Tasmania’s best ranking is fourth on equipment investment.

The State of the States report can be downloaded here.