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NSW still the best performing economy

Business hand hold rising green graphCommSec has said that the nation has a two-tiered economy, after research revealed in its latest quarterly State of the States report once again revealed New South Wales, Victoria and Australian Capital Territory to be a step above Australia’s other states and territories.

The report said that whilst there was strength in Australia’s south-eastern economies, the remainder of Australia – Queensland, South Australia, Western Australia, Tasmania and Northern Territory – had little to separate them.

Retail spending rankings between the states were unchanged from the June quarter, with September data the latest available and NSW was in front with growth 16.4 per cent above decade-average levels.

Business investment remained positive over the decade average in only two states, New South Wales and Victoria, with investment down 34 per cent in Western Australia and 20.4 per cent in Queensland.

Unemployment in Western Australia was up 46 per cent on the decade average, whereas New South Wales’s rate is 6.1 per cent lower than the decade average.

Dwelling starts remain up in New South Wales, Victoria and Queensland and down in Tasmania and Western Australia.

ACROSS THE STATES

1. NEW SOUTH WALES

New South Wales has held its position as the top-ranked economy, leading on economic growth, business investment, retail spending and dwelling starts. Home building is providing solid momentum. CommSec chief economist Craig James says Victoria or the Australian Capital Territory may challenge over the coming year.

2. VICTORIA

Victoria keeps second spot, leading on population growth and housing finance. James says the outlook for the Victorian economy remains encouraging.

3. AUSTRALIAN CAPITAL TERRITORY

The Australian Capital Territory has comfortably held onto third place, supported by a firm job market and higher home prices, which has underpinned spending. The job market remains in good shape, says James.

4. TASMANIA

Tasmania is the big improver, lifting from seventh place to fourth, with improving population growth boosting housing demand and supporting the job market.

5. QUEENSLAND

Queensland has moved up to fifth from sixth, underpinned by robust home construction. The population is growing at the fastest annual rate in almost two years, and home starts are almost 36 per cent higher than the decade-average.

6. NORTHERN TERRITORY

The Northern Territory has slumped from fourth place to sixth as slow population growth affects spending growth and demand for housing. “The Northern Territory is losing momentum,” says James.

7. SOUTH AUSTRALIA

South Australia has dropped from fifth to seventh place. South Australia’s best indicators are a middle-ranking on business investment and fifth ranking on economic growth, dwelling starts, and housing finance. James says South Australia has the potential to lift over the coming year as higher home prices and real wage gains should support consumer spending.

8. WESTERN AUSTRALIA

Western Australia remains at the bottom, with the state’s economic performance still reflecting the end of the mining construction boom. But James says the recent strong recovery in the prices for metals and other commodities, and record mining export volumes are encouraging for the state’s outlook.

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