NSW remains the best performing economy in Australia but the First State may want to look over its shoulder – it’s being caught up and fast.
CommSec’s quarterly State of the States report ranks Australia’s states and territories according to eight economic indicators. These include retail spending, population growth, construction work and home finance lending.
NSW is top of the tree and a sluggish Western Australia, still suffering from the end of the mining boom, is bottom of the pile.
But Victoria, fuelled by population growth, is snapping at NSW’s heels.
CommSec Chief Economist Craig James said: “The latest data shows Australia’s domestic economies to be in good shape but with some differences in relative performance.
“Those economies benefiting from favourable population growth are performing best, reflected in stronger home building and retail activity.”
The state economic growth rankings, according to October’s CommSec State of the States report
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NSW has kept its top spot through a combination of new home construction and low unemployment. However, it’s also a state of shopaholics, the report reveals, with economic growth fuelled by retail spending. New South Welshmen are spending 16.9 per cent above decade average levels.
“NSW remains on top of the economic performance rankings but Victoria has narrowed the gap. Both states have relatively high population growth, underpinning home building and retail spending,” Mr James said.
Victoria’s momentum in the rankings was also being driven by construction work and a second place position on housing finance.
Barangaroo, the massive new development extending Sydney’s CBD. Picture by Damian Shaw
“When looking across growth rates for the states and territories, Victoria outperforms the national average on all eight indicators,” Mr James added.
The ACT came in at third but its jobs market had softened, warned the report.
South Australia had some good news – it’s gone from sixth to fourth in the rankings.
“South Australia’s lift in rankings is driven by improvement in the job market serving to boost retail spending and new home starts,” Mr James said.
The report stated there was little to separate economic growth in Tasmania, Queensland and the Northern Territory.
WA remained the laggard of the pack, reflecting the ending of the mining construction boom. But the job market continued to improve with employment growth the strongest in 4½ years.
There may be a silver lining, however. “Western Australia’s stronger job market has the potential to lift retail and housing activity,” said Mr James.