Fading mining investment has dragged Western Australia from second down to third in the state economic rankings, according to CommSec’s January 2015 State and territory economic performance report.
Western Australia is second-strongest on three indicators: economic growth, retail trade and construction work.
However, the state has slipped to third on both housing finance and dwelling starts and has fallen to seventh on unemployment.
Last year New South Wales took over the crown as the best performing and this quarter that state is joined by the Northern Territory, pushing WA into third place.
“There will always be a changing of the guard in terms of economic performance as relative economic growth drivers variably strengthen or fade,” says CommSec’s latest quarterly State of the States report.
“The end of the mining construction boom should lead to more balanced growth in Western Australia.”
The state of play across Australia:
NSW is on top because population has been growing in recent years and now home construction is responding to the shortage of accommodation.
It is also now number one on retail trade, and second placed on business investment, dwelling starts and unemployment. NSW is fourth on housing finance and overall construction work and fifth on economic growth.
The Northern Territory now shares the top spot with NSW. While the NT economy is top-ranked on five of the eight economic indicators, it lags on population growth.
In Victoria, high population growth is supporting home building activity but it is lacking in momentum that could enable it to move up the economic performance ladder.
In Queensland, overall construction work and equipment spending are supporting economic activity. But the soft job market and relative under-performance on population growth are restricting growth in home building.
The ACT is top-ranked on housing finance but is on the bottom with unemployment.
In South Australia, annual population growth is higher than a year ago and unemployment is middle-ranked. But the state underperforms on retail spending and home building and buying.
There are brighter signs in Tasmania with the trend jobless rate at 28-month lows.
The State of States report analyses eight key indicators — economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance, dwelling commencements — to determine the rankings.
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