Victoria has dethroned Tasmania as Australia’s best-performing state or territory, with its economy leading the nation for the first time since April 2020.
CommSec’s quarterly State of the States report, now in its 13th year, compares annual growth rates across eight key indicators to gauge each region’s economic momentum.
Victoria was tops on retail spending, which was up 18.5 per cent in the March quarter (the most recent data available) as the state ended COVID-19 restrictions.
It also had Australia’s strongest job market, with unemployment at 3.2 per cent in June – 43.2 per cent below its decade average.
The Garden state was also second on both construction work done and housing finance, and third on dwelling starts.
Tasmania fell into third place, behind ACT, which equalled its best ranking since October 2021. Queensland was fourth but there’s not much separating any of them.
“Yeah, I couldn’t pick the winner in three months time. It’s just so close between the first and fourth place, and even fifth and sixth place aren’t too far away,” CommSec chief economist Craig James told AAP.
WA was fifth, SA sixth and NSW, seventh. There was a gap between that group and last-place finisher, the Northern Territory.
Overall though all states and territories were performing well in challenging times, according to CommSec.
“I think the super-low interest rates are still providing good support for the economy,” Mr James said. “And we’re seeing that in a lot of good reads in terms of housing finance and the like.
“There’s a lot of construction activity happening across Australia at the moment and that’s one of the fundamental issues.
“There’s just so much work on; that’s putting pressure on the resources, the building materials and the labour.”
Despite a drop in consumer confidence, consumers are continuing to spend.
While Queensland’s performance slipped to fourth, from a tie for third in the March quarter – its best-ever ranking – Mr James said the state had strong momentum.
“If look at the growth rate of the indicators, it basically leads Australia,” he said. “It’s tantalisingly close to taking one of the top three spots.”
Queensland leads the nation on relative population growth, up 1.42 per cent last year. And its employment growth of 4.6 per cent also tops the country.
The other six economic indicators CommSec assesses are economic growth, retail spending, equipment investment, construction work, housing finance and dwelling starts.
Its methodology compares each state’s quarterly performance to its decade averages to gauge economic momentum, rather comparing each state’s economic performance directly with that of other states.
As far as future performance goes, the report says much will depend on how each state is affected by growing COVID-19 case numbers and rising interest rates.
(Australian Associated Press)