South Australia’s economy is among the weakest in the nation, a new report says.
CommSec’s quarterly State of the States report lists Western Australia as the strongest-performer.
Each quarter, CommSec uses eight key indicators to rank the states and territories – economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance and dwelling commencements.
South Australia and Tasmania were the weakest performers while NSW and Victoria were equal in fifth place.
The report points to the SA job market as a major weakness.
“In the past 12 months the jobless rate has lifted from 5.7 per cent to 6.7 per cent and it is now 24.2 per cent above its decade average level of 5.4 per cent.”
The report says there’s been no slippage in WA’s number one ranking, although the Northern Territory has leapfrogged the ACT to become the second-best performing economy, thanks to improvements in business investment and unemployment.
South Australia’s retail spending is trailing activity across the rest of the nation, while housing construction is showing some signs of life.
Tasmania lagged behind the other economies on almost all of the indicators, except for housing finance.
“Stagnant population growth is reducing activity across the (Tasmanian) economy, with added weakness in commercial, engineering construction and business investment,” CommSec economist Savanth Sebastian said.
Tasmania had the highest jobless rate at 7.7 per cent and in South Australia, unemployment had lifted from 5.7 per cent to 6.7 per cent within 12 months.
Meanwhile, economic activity in the NT was 41 per cent above its decade-average level of output, Sebastian said.
But Queensland maintained the fastest annual economic growth rate in the nation, up 4.2 per cent on a year ago, he said.
Sebastian said all state and territory economies should see improvements soon.
“All economies should lift now that consumers and businesses are showing a sustained level of optimism,” he said.
“The low interest rate environment is boosting housing construction, while rising wealth levels are supporting confidence and, in turn, spending.
“The slowdown in mining investment will continue to affect some regions, however this should be offset by a lift in residential building.
“In addition, the lower Australian dollar should provide a boost to exports in coming months and help to alleviate the risks surrounding the rebalancing of the economy.”
The national picture was further supported in a separate report released today; two out of three Australians believe the economy is in a strong position this year, according to the annual Westpac Australia Day Index.
The survey of 1,035 Australians showed national economic positivity was up four points from 2013, led mainly by the belief that Australia is making sound economic decisions.
Tourism and resources were listed as the economy’s greatest strengths followed by Asian growth and agriculture.
But Australians are feeling less confident about their personal finances this year, with positivity dropping 11 points, the report said.
That was mainly driven by a sense that there are fewer opportunities available with regards to financial independence and the ability to create wealth and pursue a career of choice.
Almost one third of Australians said they felt their finances were out of control, citing bills as their top concern.
But 53 per cent of those people said they planned on creating a budget to get back on track.
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