The New South Wales economy is fast gaining ground on the mining states that have dominated Australia’s economic landscape for some years, two new reports say.
South Australia and Tasmania are the lag states in assessments of economic performance.
Commonwealth Securities says the NSW economy certainly has momentum in terms of population growth and therefore home building.
“NSW is also still playing catch-up after under-building for a number of years,” its chief economist Craig James says in his latest State of the States report released today.
Deloitte Access Economics economist Chris Richardson agrees, saying NSW is getting its act together with low interest rates generating better news in both retailing and housing construction, as well as better times in the state’s finance sector.
However, in his latest Business Outlook he says Western Australia, Queensland and the Northern Territory still have the economic growth “bragging rights” for now.
That’s because flagging mining investment is being matched by the export phase of the resources boom.
CommSec’s quarterly study assesses the states and territories on economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance and dwelling commencements.
The results show jurisdictions fall into three camps.
Western Australia remains Australia’s best-performing economy, followed by the Northern Territory and NSW. The next grouping is Queensland, Victoria and the ACT, while the final grouping is South Australia and Tasmania.
“While the expectation was that Western Australia would slip down the economic rankings … (it) still leads the performance rankings on two of the indicators and is second or third on five other indicators,” Mr James said.
The ACT is holding up at this stage, despite the expected impact from the federal budget cuts.
Mr James said the nation’s capital was being underpinned by low unemployment but weak confidence was constraining retail and business spending.
Mr Richardson said the good news was that the May budget didn’t add many more public servant cuts.
“But the bad news is that public service numbers will fall from here,” he said.
