Economic conditions across Australia appear to be improving, and the pickup appears to be more nationally uniform, something that hasn’t been seen in many years.
The convergence in economic performance across the country is shown in the chart below.
It’s ANZ Bank’s “Stateometer”, a visual indicator that uses 37 individual economic data points such as business and household activity, the labour and housing markets, and trade, to determine how individual states and territories are performing.
Any state or territory in the top half of the chart is deemed to be growing above its historic trend, while those in the bottom half are growing below trend. On the bottom axis, anything on the left suggests that economic activity is slowing, while anything on the right indicates it’s accelerating.
The bold symbols indicate where each currently sits, with the lighter symbol where it sat in the prior month.
Importantly, and encouragingly, almost all are now sitting in the right-hand side of the chart, indicating that activity levels are now accelerating.
And of those that are not — Victoria and the ACT — activity levels sit above their historic norms.
So all states and territories are either seeing activity levels improve, or are currently performing better than usual. That’s not only a good sign for those parts of the economy that have underachieved in recent years, but also the broader Australian economy.
According to the black symbol, indicating the performance of the entire Australian economy, activity levels continue to improve, albeit they remain weaker than historic averages.
According to Giulia Specchia and Cherelle Murphy, economists at ANZ, solid labour market conditions and the housing sector continue to support growth in New South Wales and Victoria, Australia’s most populous states.
Elsewhere, Specchia and Murphy say that Queensland and Western Australia showed better momentum in March.
“The Queensland index moved higher, although slack in Queensland’s labour market continues to weigh on economic activity,” they say.
“Activity in Western Australia continues to expand well below trend pace — which in part reflects the very strong growth rate during the height of the commodity boom — but the weight of the downturn is lifting.”
Of the others states and territories, they say that activity levels in the Northern Territory remain supported by labour market conditions while those in South Australia and Tasmania were “little changed and remain close to trend growth”.
Those in the ACT, which was up until recently the best performing economy nationwide in the Stateomoter, “lost ground as job growth slows”.