How are Australia’s states and territories performing?
Each quarter CommSec attempts to find out by analysing eight indicators: economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance, and dwelling commencement.
Then based on these eight key indicators they compare the current with the decade average and rank each Australian state based on pure economic growth terms for its State of the State report.
For the first time in more than a decade, NSW and Victoria aren’t the nation’s top-performing economies.
According to the Commonwealth Bank’s latest State of the States report, Tasmania—which usually lags behind the mainland—for the first time since October 2009holds the mantle of the best-performing economy.
Victoria slipped to second position after leading in the last eight quarterly surveys.
The ACT remains in third position, followed by NSW—which has been in the top four economies for the past six years, but both states have lost “significant ground” on the top two.
Victoria leads the way for economic growth.
Victoria maintained top spot on relative economic growth.
But remember, this was pre-Covid and the second lockdown in Victoria is likely to result in very different figures next time Commsec release their quarterly report.
Economic activity in Victoria in the March quarter was 26.5 percent above its “normal” or decade-average level of output, ahead of Western Australia, with output 22.7 percent above the “normal” level of output.
“While Victoria has slipped to second position in the rankings, largely due to Tasmania forging ahead on a number of indicators, it has generally held steady,” CommSec chief economist Craig James said.
Victoria also the winner for construction work.
CommSec found that in five of the states and territories, construction work in the March quarter was higher than the decade average, up from four in the previous quarter
Victoria has retained top spot with construction work done 28.1% above its decade average, boosted by a 2.7% increase in spending compared to a year ago.
Victoria looks like it’s trying to build his way out of this recession and has approved $3.8 billion in new projects in recent months.
Population growth is clearly an important driver of the broader economy, especially retail spending on housing demand.
Of course immigration is a key factor in our population growth, and will be insignificant over the next year or so.
However in their State of the States report CommSec reported that up till the March quarter, only Tasmania and South Australia have population growth above the long-term averages
The state with the fastest absolute annual population growth is still Victoria at +1.87%.
The next strongest was Queensland (up 1.57%), Western Australia (at 1.28%) and New South Wales ( up 1.113%).
By contrast, Northern Territory population shrank 0.38%.
The Victorian annual population growth of 1.99% is the slowest rate in 80 years, and the New South Wales population growth is the slowest and 7 1/2 years.
But Western Australia’s annual population growth of 1.13% is the the fastest rate in 5 1/2 years.
Annual growth rates of key indicators
Of the eight indicators assessed, Victoria, the ACT and Western Australia top the annual changes on two measures.
Tasmania and the Northern Territory lead the way on 1 measure
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