Western Australia is leading the rest of Australia to more intense economic activity despite the slow down in mining investment.
When it comes to retail spending, the mining state is the clear winner as this chart shows:
However, WA is in second place on economic growth, business investment, construction work done, housing finance population growth and unemployment, and fourth on dwelling starts.
But overall Western Australia still leads, according to the Commonwealth Bank’s quarterly State of the States analysis.
The Northern Territory has leapfrogged the ACT to become the second-best performing economy. But the big changes have been below with now little to separate the ACT and Queensland. NSW and Victoria follow and are closely grouped together. There is then a gap to South Australia and another gap to Tasmania with both states clearly under-performing other economies at present.
The analysis says all state economies should lift now that consumers and businesses are showing a sustained level of optimism.
“The low interest rate environment is boosting housing construction, while rising wealth levels is supporting confidence and in turn spending,” says Commsec economist Savanth Sebastian.
The slowdown in mining investment will continue to affect some regions.
However this should be offset by a lift in residential building.
New South Wales, Western Australia, Queensland and ACT are expected to benefit most from a lift in home building.
And 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.
Firm real wages and improved housing affordability are being reflected in a lift in retail spending in Tasmania. If this leads to increased employment then there will be potential for stronger economic momentum in coming months.