With the mining construction boom winding down, the Australian Dollar far from par with the greenback, and the resurgence of the services sector, the Australian economy is well and truly in a transition phase.
But this transition is having different impacts in different states. Here’s a chart from ANZ that clearly shows how this is playing out:
No longer able to rely on mining construction and investment to plump their numbers, Western Australia, the star performer from recent years, has seen its growth stall, and is now joined by near neighbour South Australia.
Victoria is experiencing above trend economic growth, but ANZ notes that the housing recovery is more mature there, and there are fewer investment projects in other states, so its growth is decelerating.
Tasmania is also experiencing a slowing housing recovery, but a weaker Australian dollar has allowed its tourism and export sectors to edge it closer to trend growth.
New South Wales, on the other hand, is revealed as the real star of the Aussie economy. Plush with roaring services and finance industries, and with a housing market with some room to run, it is not only growing at rate above trend, but growth is accelerating at the same time.
Here’s another chart showing NSW clearly pulling away from the other states in economic growth:
As you can see, NSW was hit particularly hard by the financial crises in the early and late 2000s, likely due to an over-reliance on services and finance which bear the brunt of slowdowns. But its position as Australia’s global hub, with the largest population and a popular Premier, has allowed it to pull away since.
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