The Australian economy is looking alright in early 2017, at least if the recent economic data is anything to go by.
Nothing shows that better than the chart below from ANZ.
It’s the bank’s “Stateometer” for February, an indicator that uses trends across 37 individual economic data points covering business and household activity, the labour market, the housing market and trade, to determine how individual states and territories are currently performing.
Here’s how it works.
Any state or territory on the top half of the chart is growing above 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 that it’s accelerating.
The bold symbols indicate where each currently sits, with the lighter symbol where it sat in the prior month.
While individual states and territories put in a mixed performance in the three months to February, from a broader perspective, the data is clearly improving, an outcome one would expect if economic activity levels are strengthening.
Based on recent economic data, Victoria, the Northern Territory, the ACT, and South Australia are now growing at an above-trend pace while Western Australia and Tasmania are seeing activity levels improve.
New South Wales, the largest state in terms of economic output and population, continues to grow at a below-trend pace, although the deceleration in activity levels was far slower in February than it was in the three months to January.
Queensland was the lone underachiever, recording below-trend growth with activity levels decelerating at a faster pace.
Despite the modest performances from New South Wales and Queensland, the national reading — while still pointing to below-trend growth — is now indicating that activity levels are starting to improve.
That outcome fits with recent strength in the NAB’s monthly Australian business survey, and helps to bolster confidence that the economy may strengthen further in the second half of the year.