However, CommSec believes the state has the potential to lift its performance over the coming year, with higher home prices and real wage gains supporting consumer spending.
The September quarterly analysis of the states’ relative performance, released today, shows NSW has retained its top ranking for economic growth, equipment investment, retail trade, and dwelling starts.
Victoria has taken the first position for population growth and housing finance, while Queensland is second-ranked for dwelling starts.
CommSec found South Australia’s overall ranking had fallen from fifth to seventh, only ahead of Western Australia which continues to suffer from the end of the mining boom.
For economic growth, South Australia was ranked fifth. The state’s weak points included unemployment (15.4 per cent above the decade average) and population growth (44 per cent below the decade average).
CommSec says the nation has a two-tiered economy, with NSW, Victoria and the ACT in the top tier, and the others in the second tier.
NSW has held its position as the top-ranked economy, leading on economic growth, business investment, retail spending and dwelling starts. Home building is providing solid momentum. CommSec chief economist Craig James says Victoria or the ACT may challenge over the coming year.
Victoria keeps second spot, leading on population growth and housing finance. Mr James says the outlook for the Victorian economy remains encouraging.
3. AUSTRALIAN CAPITAL TERRITORY
The ACT has comfortably held onto third place, supported by a firm job market and higher home prices, which has underpinned spending. The job market remains in good shape, says James.
Tasmania is the big improver, lifting from seventh place to fourth, with improving population growth boosting housing demand and supporting the job market.
Queensland has moved up to fifth from sixth, underpinned by robust home construction. The population is growing at the fastest annual rate in almost two years, and home starts are almost 36 per cent higher than the decade-average.
6. NORTHERN TERRITORY
The Northern Territory has slumped from fourth place to sixth as slow population growth affects spending growth and demand for housing. “The Northern Territory is losing momentum,” says Mr James.
7. SOUTH AUSTRALIA
South Australia has dropped from fifth to seventh place. South Australia’s best indicators are a middle-ranking on business investment and fifth ranking on economic growth, dwelling starts, and housing finance. James says South Australia has the potential to lift over the coming year as higher home prices and real wage gains should support consumer spending.
8. WESTERN AUSTRALIA
Western Australia remains at the bottom, with the state’s economic performance still reflecting the end of the mining construction boom. But Mr James says the recent strong recovery in the prices for metals and other commodities, and record mining export volumes are encouraging for the state’s outlook.
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