The resource states are still leading the way in the economic performance rankings.
Most have been expecting Western Australia to slip down the economic rankings as the investment phase of the mining boom winds down.
However, solid population growth has been underpinning home building.
CommSec Research’s State of the States for July shows little change in the state rankings across Australia.
“There has been no change in the rankings of States and Territories on the economic performance table,” says Craig James, Commsec chief economist.
“There are basically three groups. Western Australia remains Australia’s best performing economy from the Northern Territory and NSW. The next grouping is Queensland, Victoria and the ACT. And the final grouping is South Australia and Tasmania.
“Western Australia leads the way on retail trade and housing finance. The Northern Territory leads the way on economic growth, business investment, unemployment and construction work.
“And NSW is strongest on population growth and dwelling starts.”
Western Australia leads the performance rankings on two of the indicators and is second or third on five other indicators.
The Northern Territory economy remains close to Western Australia. But population growth lags other states and territories and that is checking activity in home purchase and construction.
The NSW economy has momentum, especially in terms of population growth and therefore home building, but the state is still playing catch-up after under-building for a number of years.
So demand for homes is still above supply.
In Queensland, the soft job market and relative under-performance on population growth are acting to constrain a broad-based lift in the economy.
Relatively high unemployment is also serving to cap growth in the Victorian economy although high population growth is underpinning home building.
The outlook for the ACT economy hasn’t changed from the assessment provided three months ago. Low unemployment is a clear strength for the ACT economy but weak confidence is constraining retail and business spending and future economic performance.
South Australia is lacking a growth driver, especially as a number of public sector construction projects have been completed or are nearing completion. The South Australian unemployment rate was the highest in the nation in June.
There are some encouraging signs in Tasmania, including economy-leading retail trade growth and trend improvement in the jobless rate.
Commsec’s run down on each state:
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