The Western Australian economy continues to outperform the rest of the nation, according to CommSec.
The state has come out on top on four of the eight criteria – retail trade, equipment investment, construction work done and population growth – and also held onto second place in retail trade and housing finance, according to the latest quareterly “State of the States” report compiled by CommSec chief economist Craig James.
The report places the Northern Territory in second place overall, close behind Western Australia, and the ACT in third.
The Northern Territory continues to lead the ranking on economic activity at 48% above its decade-average output, and the ACT is supported by strong dwelling starts and population growth. Although unemployment in the ACT is low compared with the rest of the nation, it is above the historical average at 3.5%.
There is little separating the three major states: Victoria, Queensland and NSW, according to the authoritative CommSec report, which looks at key economic trends.
NSW is benefiting from historically low unemployment together with rising population growth. Home building has improved with the help of state government grants. CommSec believes the factors will result in housing activity lifting in 2013.
Victoria has been supported by its housing sector, which is now slowing.
All states and territories are showing levels of construction work higher than their decade averages.
Victoria is in second-last place, with construction work 17% higher than the decade average for the state. In contrast to this, Victoria has the highest number of housing finance commitments, at 1.7% below the decade average and up 4.5% on November last year.
Queensland is restricted by its historically high unemployment but is supported by construction work and equipment investment. The state is ranked third in retail spending, at 15.1% above decade-averages.
"The Victorian economy is certainly still being helped by relative strength in home building. And the Queensland economy is being propelled by equipment, commercial and engineering investment," says CommSec.
South Australia is sitting well below the rest of the country yet has encouraging signs, as population growth has improved and is at two-year highs at 22% above long-term averages. CommSec believes this has the potential to lift the state via retail and housing-related activity.
Although equipment investment is above decade averages, the Tasmanian economy is still struggling due to 7% trend unemployment, which is well above the decade average of 6%.
"State of the States" is a quarterly report produced by Commsec, edited by chief economist Craig James, analysing eight key indicators: economic growth; retail spending; equipment investment; unemployment; construction work done; population growth; housing finance and dwelling commencements.