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Here’s what’s happening around Australia – State by State Economic Update - featured image

Here’s what’s happening around Australia – State by State Economic Update

How are Australia’s states and territories performing?

Now I’m not talking about their property markets, but their economies.

Of course the performance of their real estate markets is intimately tied to their economic performance and that why I carefully study CommSec’s quarterly State of the States Economic Update which analyses eight key indicators: economic growth; retail spending; equipment investment; unemployment; construction work done; population growth; housing finance and dwelling commencements.Economy Australia

Just as the Reserve Bank uses long-term averages to determine the level of ‘normal’ interest rates; Commsec have done the same with key economic indicators.

For each state and territory, the latest readings for the key indicators were compared with decade averages – that is, against the ‘normal’ performance.

Key findings

  • Victoria remains the best performing economy.
  • Tasmania has held on to second spot from NSW but there is little separating the top three states.
  • The ACT is solidly in fourth position.
  • Then there is a gap to Queensland and South Australia.
  • And then follows Western Australia and the Northern Territory.

Victoria benefits from high construction work and a strong job market.

Tasmania holds second spot with strength in relative population growth, supporting home purchase and starts.

NSW remains consistently strong across all indicators and is ranked second on three of the eight indicators.

The ACT is in fourth spot, supported by a strong job market and solid demand for homes.

Queensland is in fifth spot, ahead of South Australia. There is little to separate the two states.

Western Australia remains in seventh position, ahead of Northern Territory.


Economic Growth


Victoria remains Australia’s best-performing economy, leading the overall economic performance rankings.

Victoria ranks first on economic growth, retail trade, equipment investment and construction work done.

Victoria’s lowest ranking is fourth on relative population growth and housing finance.

Tasmania remains just in front of NSW in second position on the performance rankings.

Tasmania is ranked first on relative population growth and dwelling starts and is in second spot on housing finance.

NSW is consistently strong across the indicators and is second or third on six of the eight indicators.

So there is little to separate NSW and Tasmania on the overall rankings.

The ACT is solidly in fourth spot on the rankings.

The ACT is ranked first on housing finance and relative unemployment and second ranked on equipment investment.

Queensland retains fifth position on the economic performance rankings.

Queensland is second ranked on relative population growth and third ranked on relative economic growth. But Queensland is fifth or sixth on five of the eight indicators.


South Australia is in sixth position on the performance ranking.

South Australia is third ranked on relative population growth and fourth on construction work done.

Western Australia retains its seventh position on the economic performance rankings and continues to edge away from eighth-ranked Northern Territory.

Western Australia is sixth or seventh on all indicators except relative economic growth where it is in fourth position.

The Northern Territory is seventh-ranked on relative economic growth but lags all other states and territories on the other seven indicators.

Population Growth


CommSec assess relative population performance – the current annual growth rate and compare it with each economy’s decade-average (‘normal’) growth pace.

Population growth is clearly an important driver of the broader economy, especially retail spending and housing demand.

The key point being that only three economies have population growth above long-term averages.

Tasmania is strongest on the relative population measure, with its 1.13 per cent annual population growth rate 94.8 per cent above (around double) the decade-average rate.

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Queensland is now next strongest on relative population growth, up 2.3 per cent on the decade average, followed by South Australia (up 0.3 per cent).

Annual population growth rates in the other states and territories were below decade averages: Victoria (down 1.2 per cent); NSW (down 1.4 per cent); ACT (down 20.0 per cent); Western Australia (down 35.9 per cent); and Northern Territory (down 149.8 per cent).

The state with the fastest absolute annual population growth is still Victoria (up 2.05 per cent). Next strongest is Queensland (up 1.71 per cent), ACT (up 1.51 per cent) and NSW (up 1.37 per cent).

By contrast, the Northern Territory population shrank by 0.48 per cent over the past year after falling by 0.54 per cent in the year to December.

South Australia’s annual population growth of 0.87 per cent is the fastest rate in four years.

Western Australia’s annual population growth of 1.06 per cent is the fastest rate in 41⁄2 years.

Retail Spending


The measure used to asses retail spending was real (inflation-adjusted) retail trade in trend terms with September quarter data the latest available.

There have been no changes in the rankings since the last quarter.

Victoria remains in top spot on the retail rankings, ahead of NSW.

Retail spending in Victoria was 14.9 per cent above decade-average levels in the September quarter.

Strong population growth, low unemployment, rising home prices and infrastructure building are key supports for retail spending.


Spending in NSW was 11.94 per cent above decade- average levels, once again supported by population growth, higher home prices and firm employment.

Spending in the ACT was up 11.93 per cent on the decade average, followed by Tasmania (up 10.7 per cent).

In fifth spot is Queensland with spending 9.0 per cent above decade averages followed by South Australia, with spending up by 8.5 per cent.

Northern Territory recorded the weakest result with retail spending down 2.1 per cent on the decade average, below Western Australia with 3.3 per cent growth.

If monthly retail trade was assessed instead to calculate the rankings (November data available), there would be no change in the relative rankings except NSW would be in fourth position behind ACT and Tasmania.

In terms of annual growth of real retail trade, Queensland is now strongest (up 1.7 per cent), from Victoria (up 0.41 per cent) and the ACT (up 0.40 per cent).

Looking at annual growth of monthly retail trade, Tasmania (up 4.9 per cent) is ahead of Queensland (up 4.8 per cent and the ACT (up 4.2 per cent).

Source: CommSec State of the States report January 2020

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About Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media.
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