The ANZ Stateometer, which measures economic performance across the states and territories, continues to highlight the uneven economic growth across the country.
- New South Wales is posting well above-trend growth according to ANZ’s Stateometer, although growth has slowed sharply over recent months.
- The Stateometer suggests that Victoria’s economy is growing slightly above trend.
- After almost returning to trend earlier this year, Queensland’s growth continues to decelerate and is now significantly below trend.
- Western Australia continues to expand at a well-below trend rate of growth, with a recent small improvement unwound. The Northern Territory is also growing at a below-trend rate, although its momentum has improved significantly.
- Tasmania, South Australia and the Australian Capital Territory are all growing at near-trend rates.
Source: ABS, CoreLogic, National Australia Bank, Residex, SEEK, Westpac, ANZ Research
ANZ monthly stateometer by state:
New South Wales moderates further but remains above trend
• The New South Wales index continues to signal that growth in economic activity is at an abovetrend rate.
• However, the smoothed index has fallen to its lowest level since early 2015, pointing to a marked slowdown in growth. This reflects slower growth across the labour market, the property market and the household sector.
• A broad slowdown in the underlying data suggests to us that the smoothed index will edge lower in July.
Victoria grows in line with trend
• Economic growth in Victoria is expanding at a slightly above-trend rate according to the smoothed state index.
• The index has been supported by the labour market, although the property market also remains a bright spot.
Queensland economy slows further
• After showing solid momentum through 2015, Queensland’s economic growth has steadily decelerated over the past few months and is now well below trend.
• The fall in the smoothed index reflects some weakness in the household sector, but a weaker labour market has played a larger role.
• The smoothed index is now back at the low reached in August and the underlying data suggest to us that there is a risk that growth slows further in July.
South Australia growth close to trend
• The index for the South Australia’s economy continues to signal growth is just below its trend rate, which is well up on last year’s low.
• A sizeable improvement in labour market conditions over recent months has driven the turnaround in the index this year.
Western Australia growth remains weak
• Economic growth in Western Australia remains at a significantly below-trend pace. The smoothed index improved slightly in April, but this has been unwound and the index is back at the seven-year low reached in January.
• The main drag on the index this year has been the labour market, although the contributions from both the housing market and the household sector have also been relatively weak.
• Based on the underlying data, we see a risk that the index weakens further in July, driven by the labour market and the housing market.
Tasmania’s growth picks up slightly
• After decelerating over the first months of 2016, Tasmania’s economic growth picked up slightly over the past two months and is now close to trend.
• The improvement in the index has been broadly based, with the property, business and household sector all growing at an about-trend pace.
• We see a risk that this improvement may be partly unwound in that the underlying data show that the labour market weakened in June.
Northern Territory’s momentum turns more positive
• Economic growth in the Northern Territory remains below trend but has steadily improved over the past three months.
• After reaching a five-year low in March, the territory’s smoothed index has rebounded to its highest level since November 2015, which suggests to us that a turning point has been reached.
• The more positive momentum has been driven by the recent improvement in the labour market
The ACT’S growth remains above trend
• Economic activity in the Australian Capital Territory is growing at a modestly above-trend rate, with the territory’s smoothed index showing a sharp pick-up in June.
• The smoothed index is at its highest level since February, which itself was the highest level since 2011.
• The key contributor to the improvement in the index is the buoyancy in labour market conditions.
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