Western Australia remains the best performing economy in the nation, although the Northern Territory continues to close the gap, according to the latest State of the States report out today.
The quarterly assessment of Australia’s state economies places the ACT in third spot before a gap to Queensland, Victoria and NSW, and another a sizeable break to South Australia followed by Tasmania.
Each of the states and territory economies were assessed on eight key indicators: economic growth; retail spending; equipment investment; unemployment, construction work done; population growth; housing finance and dwelling commencements.
Western Australia tops retail trade, equipment investment, construction work done and population growth. The Northern Territory, meanwhile, was the best in overall economic growth and unemployment, and was second strongest on retail trade and dwelling starts.
Looking at the strengths of the top two economies, the research is a strong endorsement of the disposable incomes driven by resources with the country's three biggest mining economies all performing well above decade averages for retail spending.
Looking down the overall rankings, there is still little to separate the country’s three largest states.
Victoria is supported by its housing sector but is losing momentum, Queensland is strongest on construction work and equipment investment, but is restrained by historically-high unemployment, while NSW benefits from having historically-low unemployment coupled with rising population growth.
South Australia and Tasmania remain the laggards, however population growth is rising for the crow-eaters and is well above the states longer-term average, potentially boosting housing demand, non-residential investment and retail spending.
That said, Western Australia is well ahead of the pack in population growth.
It’s not such an upbeat outlook for Tasmania though, lagging all other economies on four of the eight indicators: overall economic growth, retail trade, population growth and construction work done. Their best ranking is fourth on equipment investment.
Looking ahead, CommSec expects to see little change in the rankings, however has identified the Northern Territory as having the greatest scope for further improvement on the back of above average growth in investment and population growth.
Western Australia should continue to hold its position as Australia’s best performing economy over 2013 though, underpinned by rising population growth and the rolling resources boom.
It all points to an economy struggling to shift out of its two-speed economic gearbox. The report is a super insightful read as we continue to make that transition, so jump onto www.comsec.com.au and download the full report if you’re interested.
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