As a property investor it's important for you to understand what's happening in our broader economy, because our property markets don't perform in isolation. 
In fact they are very dependant on the local economy as this leads to jobs growth, wages growth and even population growth - all significant drivers of our property markets
But there are so many economic indicators - which should you look for and how do you interpret them?
Fortunately the ANZ Bank made it easier in their recently ANZ Stateometer where they showed the economic states of the states.
Here's what they said:
Improved economic activity across all states contributed to national strength in the last quarter of 2017.
The territories were outliers at the top and bottom of the scale.
A convergence theme continued with the mining states of Queensland and Western Australia demonstrating above-average activity; while New South Wales, which has been a strong performer, continued to grow but did not accelerate.
Common factors included: strong global conditions, public sector spending, accommodative monetary policy and the lower Australian dollar.
Only the small and volatile Northern Territory, due to its unique circumstances, decelerated to a below-trend pace.
Commodity price rises helped speed up the mining states, while softer conditions in the residential sector tamed growth in NSW.
Helping explain the convergence in overall economic activity has been the emergence of similar trends across sectors. 
For example, in all regions, except for NT, the labour market was the strongest contributor.
Despite solid employment growth, household activity was below average in all regions except Victoria and the ACT.
The common factor is the drag on spending from persistently weak wage growth.
High household debt is also affecting spending for some.
Housing was a negative in all states, except Victoria and Tasmania.
Business activity was above trend in all states and territories except the NT.
This strength has been reflected in recent confidence surveys.
THE ANZ STATEOMETER, IN THE DECEMBER QUARTER, SHOWED:
- Victoria, ACT, Tasmania and the mining states, Queensland and Western Australia accelerating with above trend growth.
- New South Wales expanding but with no additional momentum.
- South Australia decelerating, but still growing at an above-trend pace.
- Northern Territory growth both below trend and decelerating.
ANZ Stateometer for December quarter 2017
NEW SOUTH WALES
- Activity in NSW was above trend in the December quarter, the third straight quarter above trend.
- The strongest component – the labour market – was at its most positive level since early 2016.
- Business activity and trade were also positives.
- The main negative was the household sector, likely reflecting the persistent weakness in wage growth.
- Housing also turned slightly negative.
HOUSING: DOWN BUT NOT OUT
Housing has been a significant contributor to the NSW economy in recent years, through its impact on construction and employment and (via house price growth) on home owners’ balance sheets.
It is prudent to ask whether the softening in recent data will slow the NSW economy.
Although house prices are no longer rising, we are confident they will not suffer significant widespread declines.
The auction clearance rate has stabilised and weakness in Sydney house prices appears to be easing.
Although apartment building approvals have declined, the detached/townhouse segment is growing and house approvals remain stable.
Leading indicators, such as housing finance for the construction of new housing, suggest building approvals are not yet ready to trend materially lower.
Further, the backlog of work already in the pipeline is at a record high, which means construction activity will stay up for some time yet.
So, while strong growth has waned, we do not expect housing to become a drag.
PUBLIC SECTOR SPEND FLOWS TO PRIVATE SECTOR
Public sector infrastructure spending and the associated rise in private sector activity are substantial drivers of NSW activity at the moment.
Public demand contributed 0.9 percentage points to growth in the year to September 2017, above its historical average contribution.
The government has added new capital works projects to its plans, including Parramatta Light Rail and the Princes Highway Albion Park rail bypass.
Business conditions have eased since our last report three months ago, but remain high by historical standards and well above their long run average.
HOUSEHOLDS CONSOLIDATE
Very strong growth in employment has eased a little and the unemployment rate has risen to 5.1%, the highest in a year.
However it remains below the national rate and reflects a return to normal conditions, rather than a significant slowdown.
Households also appear to be slightly more cautious in their spending, with the annual turnover growth slowing into the second half of 2017, after a very strong first half.
Population growth, while solid at 1.6% in the year to June 2017, has factored less in lifting growth than in Victoria and ACT.
We expect solid gross state product growth of 3.5% in 2017-18 and 3.0% 2018-19 after 2.9% growth in 2016-17.
VICTORIA
- Victoria’s streak of above-trend activity continued in the fourth quarter.
- All sectors grew above trend, but the labour market was the best.
- Housing was a positive, due to the price growth and construction activity.
- Households, business and trade were also positive contributors, although less so.
STRENGTH IN CONSTRUCTION
As in NSW, housing has been a great source of strength for Victoria and we expect it to continue to be, albeit slightly less strong this year.
The semi-detached/townhouse segment is growing rapidly and well above the NSW equivalent.
Knock-down rebuilds are proving an attractive way of adding to the housing stock in Melbourne, without going high rise.
Confidence, as reported by the ANZ-Property Council Survey, was solid, making Victoria and WA the only states with increasing sentiment in the March quarter of 2018.
Victoria overtook NSW as the most optimistic state or territory.
The survey also showed Victoria as the only state where property industry employment expectations in the year ahead are still rising.
General business conditions, as reported by the NAB survey, have eased but remain high by historical comparison and well above the long- run average.
PUBLIC SPEND SOFTER THAN NSW
Public investment is a solid contributor, with several state government major projects underway and spilling over into the private sector.
The Commonwealth government is adding to state spending, with the inland rail project, which will run from Melbourne to Brisbane.
The projected size of the Victorian Government’s spend is bigger than most but modest compared to NSW’s, at around 0.14% of GDP over the current and coming three financial years.
NSW plans state net capital investment of around 1.46% of GDP over the same period.
UNEMPLOYMENT MOVES LOWER
Employment growth rose at an average of 3% in December and January, and participation has been at or close to a 40-year high.
The unemployment rate edged down to 5.6% in January, having been stuck at close to 6% for most of 2017.
Victoria’s very strong population growth rate has added new job seekers and, more so than last quarter, many are finding employment.
In part due to such strong population growth, Victoria’s retail turnover has been stronger than any other state and territory.
It rose 4.5% in the year to December.
We expect Victoria’s gross state product growth will be around 3% in 2017-18 and 2018-19.
This would be a slight softening from 3.3% growth in 2016-17 but marginally higher than our national GDP growth forecasts.
QUEENSLAND
- Qld’s economy improved in the December quarter, with activity above trend for the first time in two years.
- The main driver of the improvement was the labour market.
- Business and trade activity were marginally above their long term averages.
ABOVE TREND
Although well past the mining investment boom, Qld’s prospects improved as it became a major LNG producer and exporter.
LNG is now the state’s second largest export.
Previous infrastructure development assisted the resources sector, with an improvement in global demand also helping via an uptick in commodity prices.
Qld’s diverse economy and the lower AUD have also played a role in boosting its export prospects, particularly in services.
The April Commonwealth Games in the Gold Coast may play a small role in boosting tourism.
Through much of 2017, Qld had slower growth in both domestic and international visitor arrivals than the south-eastern states.
NON-MINING AND PUBLIC INVESTMENT RISE
Private resources investment has declined recently, but public and non-mining investment have lifted.
Public investment rose 4.3% y/y in the September quarter, while private non-dwelling investment was 11.5% higher.
This is partly attributable to the upcoming 2018 Commonwealth Games, which helped a rebound in non-dwelling building activity.
JOBS, ESPECIALLY FOR PUBLIC SERVANTS
In the year to January, total employment in Qld increased by 5% – the highest of any state – with 118,000 jobs added.
The participation rate rose from 64.3% to 66.3%.
Quarterly data reveal the government has been a particularly large source of job creation, with public sector employment increasing 7% y/y in November, the second highest among all states and territories.
CONSUMPTION REMAIN SOFT
Consumption activity continues to be weak.
Retail sales increased only 1% in the year to December, which was the worst calendar year performance since 2009.
As in the rest of the country, soft wage growth has hampered spending, while price rises for many non-discretionary services and high household debt have no doubt added to cautious household behaviour.
The housing sector bears watching, particularly for signs of rising settlement risk.
Investor housing loan approvals, as in NSW, have fallen.
The supply of new apartments is set to peak in 2018. After that, residential construction activity will slow, as building approvals have passed their peak.
We expect Qld’s gross state product growth rate will be around 2% in 2017-18 and 2.8% 2018-19.
This is faster than the 2016-17 rate of 1.8%, but below its long-run average.
This was boosted in earlier decades by strong population growth but, as in WA, that dissipated with the resources investment softness.
WESTERN AUSTRALIA
- WA returned to slightly above-trend activity in the fourth quarter, for the first time since the beginning of 2013.
- The labour market component was the strongest contributor, while business activity was a small positive.
- Housing was the largest drag and was well below trend.
- Trade was a slight negative, while the household sector was hampered by weakness in consumption activity.
MINING INVESTMENT STILL ADJUSTING
Mining investment continues to fall as production associated with the major LNG projects nears completion.
It is likely therefore that state final demand (which excludes the export sector) will fall again in the current financial year, following a steep decline of over 7% in 2016-17.
A renewed rise in private investment is most likely due to the need to replace depreciated capital at existing iron ore and LNG operations.
Higher commodity prices will also help the medium term outlook, although we do not expect prices or activity to rise to the heights of the early 2000s.
Business conditions have risen according to the NAB survey, but remain well below historical highs, unlike the larger states of NSW and Victoria.
The March quarter ANZ-Property Council Survey showed WA’s confidence levels have improved dramatically.
Employment figures reflect green shoots, and labour underutilisation has started to fall.
Employment grew solidly in 2017, as did the participation rate.
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The unemployment rate has therefore been broadly steady in recent months.
(5.7% in January 2018). We expect employment growth to continue improving as job advertisements are creeping higher.
EXPORTS TO RECOVER
Although trade was a negative influence on the ANZ Stateometer in the September and December quarters, we expect that phenomenon to be short-lived.
A pick-up in net exports is likely to result in a positive rise in real gross state product in 2017-18.
Last financial year, gross state product fell 2.7%.
HOUSEHOLDS WARY
Households have been reluctant spenders through the recent turmoil in the WA’s economy.
Retail turnover has fallen in nominal terms over the last year. Compensation of employees fell across the state.
Wealth has also suffered from falling house prices.
Dwelling investment is down sharply, reflecting the changing population patterns and weaker employee compensation.
We expect export fuelled growth to lift WA’s gross state product growth rate to 2.5% in 2017-18 and 3.3% in 2018-19.
SOUTH AUSTRALIA
- SA’s economic activity was above trend in the December quarter, but momentum slowed.
- Labour market activity followed the same pattern.
- Trade was a positive. Business activity was close to its trend rate. Housing was the soft spot.
- Household activity was below trend but up on the prior quarter.
LABOUR FORCE
Against the odds, job numbers in SA have grown solidly.
Auto manufacturing ceased in 2017 and defence shipbuilding has yet to advance.
SA’s unemployment rate was 6.0% in January 2018, after averaging 5.9% in the December quarter, down from an average of 6.7% in the December quarter of 2016.
The state’s participation rate lifted slightly over the last year to 62.6% but is below its historical high of 64.3%.
The lower AUD and low interest rates supported the state, which is suffering less from the downturn in mining investment than some other states.
With slow population growth, SA has not experienced NSW and Victoria’s strong upswing in residential construction.
Building approvals for apartments and houses have been steady.
We expect modest growth of around 1.5–3% in house prices this year, which is a below the 2–5.5% rates recorded in recent years.
The lower AUD has assisted agribusiness, as did the record winter crop in 2016-17, which is unlikely to be repeated this financial year, according to the state’s treasury.
International education and tourism, in particular, have done well out of the lower AUD.
ELECTION SPEND
A period of softness followed completion of big public projects, like the Royal Adelaide Hospital.
But public investment grew overall at a very healthy 19% in the year to September 2017.
Although SA’s public infrastructure spend is around a fifth of NSW’s, planned or commenced energy projects – the Northern Connector project, the South Road Torrens to Torrens project and the Darlington upgrade – lift the outlook.
The incumbent government has also announced further transport projects if it wins the state election on 17 March.
HAPPY HOUSEHOLDS
Labour market improvements and steady economic conditions lifted retail sales.
Retail turnover rose 4.4% in the year to December, the strongest rise in 2½ years.
The latest per capita volume data shows that South Australians lifted retail consumption faster than any other state or territory in mid-2017.
We expect moderate growth in SA’s gross state product, of around 2¼% in 2017-18 and 2½% 2018-19.
This would be the highest since before the GFC and marginally above SA’s long term average.
AUSTRALIAN CAPITAL TERRITORY
- The ACT was the best performer in the fourth quarter.
- The labour market was the standout sector supported by strength in both public and private hiring.
- Trade and the household sectors were also positives.
- Housing decelerated, growing at a slightly below-trend pace.
DIVERSIFICATION
The ACT’s small and concentrated economy has become marginally less small and less concentrated.
Helped by solid population growth, it posted stellar 4.6% gross state product growth in 2016-17 and is on track for another good year.
Exports – including international education and tourism – are helping to broaden the ACT’s economic base and have made a positive contribution to the ANZ Stateometer since mid-2016.
International student enrolments have been solid and the ACT government now estimates university and vocation education students contribute around AUD750m to the economy annually.
That is equivalent to around 4% of total consumption.
Decentralisation of Commonwealth Government departments is a risk that would weigh heavily on economic activity, but would also accelerate further diversification.
JOB SEEKERS ATTRACTED
Participation in the ACT labour market was very high (although not a record) at 72.9% in trend terms in January.
The unemployment rate has therefore remained broadly steady at 4% over the last year even though employment growth was a solid 4.8% y/y in trend terms.
Job vacancies suggest solid employment growth is ahead.
Wages growth has been subdued in line with the rest of the country, and low outcomes from Australian Public Service wage negotiations affect the Capital more than others regions.
INVESTMENT STRONGER IN PUBLIC SECTOR
Public infrastructure has been dominated by the light rail project, law courts upgrade, health and public housing.
Underlying public investment rose to a record high in the year to September 2017.
Private business investment has been weaker, having moved sideways for several years.
Dwelling investment has also grown strongly and, although volatile, appears to have reached a peak.
Canberra house prices did not rise as quickly as Sydney and Melbourne over the last three years.
We expect moderate growth to continue in 2018, helped by a solid labour market and population growth, especially due to overseas immigrants.
We expect ACT gross state product to grow 4% in 2017-18 and 3% in 2018-19, after expanding by 4.6% in 2016-17.
TASMANIA
- Tasmania’s economic activity was above trend in the December quarter, for the fourth successive quarter.
- As with most regions, the labour market was a strong positive.
- Housing accelerated, thanks to an upswing in house prices.
- The household sector in contrast, grew at a below-trend rate.
POPULATION AND HOUSE PRICE GROWTH
In the June 2017 quarter, net migration from the rest of Australia was at its highest since 2010.
The improvement in overall population growth to above the long-term average rate is feeding into the property market.
In January, Hobart’s dwelling prices increased 12.4% y/y, highest among capital cities.
If this price growth continues, it should lead to an up-tick in residential building approvals and activity, both of which dipped in 2017.
Due to low wages growth and rising indebtedness, though, households have been less of a source of stimulus to the economy through their consumption.
PUBLIC SPENDING AND BUSINESS CONFIDENCE
Public spending on capital works has been a positive for non-dwelling construction.
This has been focused in a few large projects, such as upgrades at the University of Tasmania and the Royal Hobart Hospital.
The state will hold an election on 3 March.
Business conditions have improved markedly.
According to the NAB survey, actual conditions in the December quarter and expectations for the year ahead were well above their long-term averages.
Importantly, employment conditions started to improve after falling to a three-year low at the beginning of 2017.
Reflecting this, total employment in Tasmania increased 3.2% y/y in December 2017, improving on the previous two calendar years.
This helped to increase the participation rate by 1.4 percentage points to 61.3%, the highest since 2015.
TRADE SUCCESS
The state has been boosted by its international success and interstate visitors.
Tourism and agriculture, both major export earners, have added to growth in the year ahead and are likely to continue to do so.
Tourist arrivals from abroad increased 24% y/y in December.
For some time, there has been efforts to accommodate arrivals with new tourism developments.
Our expectations are for Tasmanian gross state product to grow by 2% in 2017-18 and 2½% for 2018-19, a pick-up from the 1.1% growth rate recorded in 2016-17.
Our expected growth rates are close to the state’s long-term average.
NORTHERN TERRITORY
- The Northern Territory’s small and volatile economy ran at a well-below-average rate in the December quarter.
- The main drag was the labour market, which has performed below trend for three consecutive quarters.
- Housing, the household sector and businesses were all negative as well.
ICHTHYS COMES CLOSE TO PRODUCING
After significant investment activity that averaged AUD4bn a year over the last five years, the Ichthys gas field will start production in March.
With the bulk of investment activity completed and production yet to commence, the Territory was in a weak spot in the December quarter.
NEW PROJECTS
The drop off in construction has flowed on to the labour market.
In the year to January, total employment declined 3.1%, due to a 4% y/y decline in full-time employment.
The NT treasury estimates that, due to the end of the construction phase of Ichthys, there will be a once-off 2.5 percentage point drag on employment growth in the 2017-18 financial year.
As the drag lifts and other projects commence, employment growth should recover.
Some new employment opportunities are arising from projects in the pipeline, including the Darwin Port redevelopment and the RAAF Base Tindal upgrade.
These however are a fraction of the size of Ichthys.
RESPONSIVE POPULATION
Given the that Territory’s small population is responsive to economic conditions, it is unsurprising that interstate migration flows have been negative since the end of 2009.
On the positive side, total population increased by just over 1,000 in the June 2017 quarter, the largest rise in two years.
HOUSING STUMBLES
The Territory’s housing market is also experiencing a soft patch.
The value of residential building activity fell 25% y/y in the September quarter.
With building approvals for new dwellings remaining low in the final months of 2017, a rebound in residential construction isn’t on the cards in the near term.
House prices have fallen in recent years and we expect there could be a further decline in 2018.
Our expectations are for the Territory’s gross state product to grow by 1.0% in 2017-18 and 2½% for 2018-19, slowing from 3.9% growth in 2016-17.
