- Victoria has emerged as the strongest state economically, according to the latest breakdown by CommSec. The analysis showed the state was the best place in Australia to find a job, backed by solid population growth and a building spree.
- New South Wales wasn’t too far behind, with what was the most consistent economy across all its sectors. Tasmania managed a surprise inclusion at number three due to its housing boom.
- No good news for Western Australia and the Northern Australia however as the two state continue to struggle, with Northern Territory’s population actually shrinking the most since quarterly recording began 36 years ago.
While it’s easy to get carried away with the trajectory of the Australian economy, its useful to dig under the hood and see what’s going on with each of its different parts.
Just like the nation’s property markets, things vary drastically between different states, particularly when you contrast some members of the eastern seaboard with their peers.
Looking at the latest quarterly data, Victoria has overtaken New South Wales for the first time in 2019, according to CommSec’s regular State of the States report.
It assesses each state on its population and economic growth, as well as the strength of its retail and construction sectors. It throws in the number of new dwellings being built, as well as unemployment, home lending and equipment figures.
Tasmania continues to rocket up the rankings due to the strength of its property markets while Western Australia and Darwin are still lagging well behind the others.
This is how they all stack up and the factors dragging or driving them.
Victoria has snagged the gold this time around, as residents pump money into the strongest retail and construction sectors in the country, and in turn, create the strongest job market.
In fact, across the eight indicators, Victoria took out top honours in half of them, with large scale infrastructure projects securing jobs and pumping cash into the economy.
Its worst performance? Relative population growth ranked fourth in the country, after a multi-quarter boom in the numbers of new residents. That doesn’t negate the absolute growth however, with the number of Victorians growing by 2.18%, above and beyond what any other state can boast.
New South Wales
While it may have ranked second overall, NSW proves to be the most consistent across all major indicators, coming in first or second in nearly all measures.
In fact, it was only when it came to annual population growth and home lending that NSW ever left the podium. Despite that, it topped the country for new dwellings started, building at a rate well above its decade-long average.
What ultimately cost it was falling business investment, as confidence in Australia’s first state waivers.
Tasmania has sprung up the rankings based solely on the strength of its housing market which has helped spur a building spree.
In Hobart, house prices have risen 35% in just three years, outpacing other capital cities around the country.
That’s been helped along by strong relative population growth — the best in Australia this quarter — and seen home lending soar.
As a result of that confidence in the state, Tasmania boasted the best business investment in the country and came in second on the number of new dwelling starts.
It bodes particularly well when you throw in the fact that annual vehicle registrations are by far the highest in Tasmania — one of the leading indicators of future growth.
“(That) could see the Apple Isle battling with NSW and Victoria for top position in the year ahead,” CommSec wrote, looking ahead.
The housing boom in Tasmania helped it push the Australian Capital Territory (ACT) down to fourth. That’s despite its home lending being the second-highest relatively in the country and a sign of the strength of the finance sector.
In fact, the ACT is humming along quite well, with unemployment shrinking well below its decade average and retail trade picking up by 1.5% on last year.
Like Victoria, that’s helped somewhat by its population growing by a steady 1.82%, supporting many of those leading indicators.
Coming in fifth place is the last eastern state, Queensland. The disappointing result is due to a mixed bag of results.
While the sunshine state was the third best state in terms of relative economic growth as well as in population terms, it was lacklustre in others.
Fifth and sixth-placed results in everything else saw it plummet down the rankings. Particularly hurtful was the fact that construction activity is more than 20% below its decade-long average.
Heightened unemployment and falling home lending levels are a concern, but retail spending offsets that somewhat as it continues to grow at 5.5% annually.
While trailing behind Queensland, South Australia isn’t very different. In fact, according to CommSec, its performance has been almost indistinguishable from Queensland for the last 18 months.
Home lending ranked as South Australia’s strongest performance, falling by less than 5% compared to much larger falls in Queensland, WA and the Northern Territory.
Tellingly, the two states with the worst capital city property markets, Western Australia and the Northern Territory, are also home to the worst economies.
Both form the bottom two rankings of nearly every measure, with Western Australia coming last on relative economic growth.
The small upshot for WA is its annual population growth is now the strongest since 2015.
One of the most troublingly signs for the Northern Territory is its population growth. While every other state recorded a positive uptick in absolute terms, the NT actually went backwards. Its decline of 0.41% was the largest fall in 36 years of quarterly record keeping.
With its property markets still in trouble, it’s no surprise that building activity was 60% below the 10-year average.
Perhaps the one bright spot is exports are up more than 40% from the mining state, helping offer some small support.
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