Western Australia may be facing declining mining investment but in the national economic race it is still out in front of its brother states on most prosperity measures.
But the state the to watch is Queensland which has drawn level with New South Wales in fourth place behind Victoria in third and the Australian Capital Territory in second overall.
“Western Australia remains the top-performing economy in the nation with no slippage in the ranking over the past three months,” says CommSec’s State of the States analysis released today.
“But the big changes have been below with now little to separate Northern Territory, Queensland, NSW and Victoria, although in that order.
“There is then a gap to South Australia and another gap to Tasmania with both states clearly under-performing other economies at present.”
Queensland is biggest on business investment and third on economic growth, retail trade and construction work.
NSW is strongest on unemployment, and third strongest on population growth.
Victoria is second on unemployment and third strongest on housing finance.
But at the other end of the scale, NSW is seventh on economic growth while Victoria is seventh on construction work.
CommSec assesses each state and territory on: economic growth; retail spending; equipment investment; unemployment, construction work done; population growth; housing finance and dwelling commencements.
Western Australia retains top spot on the retail rankings with spending in the June quarter 23.9 per cent above average.
Deloitte Access Economics, in its Business Outlook report today, agrees about Western Australia being on top.
“Western Australia’s growth is still magnificent. Yet that can’t last. Although the current spend on construction is huge, there simply isn’t further growth in those dollars waiting in the wings. Costs are still too high for the state to be particularly competitive in landing big new projects.”
However, NSW’s time is coming.
Deloitte Access Economics says the state wasn’t a big beneficiary of the resources boom but it is lapping up lower interest rates and a more moderate Australian dollar.
“Australia’s states still show a ‘two speed split’ but that split is already narrowing and we see further narrowing in the next couple of years as the ‘construction cliff’ saps strength from the likes of Western Australia and Queensland.
“Lower interest rates and exchange rates generate some better news for the likes of NSW and Victoria.
“To be clear, this is a narrowing of the split, rather than its abolition for all time. WA and Queensland have grown faster than the rest of Australia for a decade and that’s still likely to be true over the coming decade too. However, the super-charged gains of the Sunbelt States in recent times are on borrowed time.”