The economic strength of Australia’s south east is building strongly but starting to flag in the west and the north, according to Deloitte Access Economics.
“New South Wales is getting its act together, although resource states will still top 2014-15 growth leader board,” the forecaster says in its latest quarterly business outlook report.
Overall, Australian economic growth is looking good thanks to the third phase of the resources boom, which has seen a surge in export volumes, kicking off strongly.
Low interest rates are generating more home building and a lift in retail turnover growth.
“But we’re not out of the woods yet,” says Deloitte Access Economics.
“Export gains may now take a breather until gas kicks in some time in 2016 and beyond, whereas the degree of decline in mining construction is set to accelerate.
“And although the Federal Budget did little to punters’ pockets in the next couple of years, people think it did cut savagely, and so consumer confidence has dropped.
“Those factors may take some steam out of economic growth, which may ease back under trend until late 2015.”
The baton pass from the resource states is slow because so is the matching shift from the construction to the export phase of the resources boom.
“That’s why the sun belt of Western Australia, Queensland and the Northern Territory still has growth bragging rights ahead for 2014-15,” says Deloitte Access Economics.
“Yet there is already a move on, evident everywhere from slowing population gains in Western Australia and Queensland, to the rising pace of the population gains seen in both NSW (the fastest growth since 2009) and in Tasmania (the fastest in two years).”
NSW is getting its act together, with low interest rates generating better news in both retail and housing construction, as well as better times in the state’s finance sector.
Deloitte Access Economics forecasts gross state product in NSW to grow by 3% in 2014-15, up from 2.8% in 2013-14, compared to 1.9% in Victoria, 3.2% in Queensland, 2% in South Australia, 2.6% in Western Australia, 5.7% in the Northern Territory and 2.5% in Tasmania
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