Five features of the National Economic Performance Report

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Australian Economy, Uncategorized

The lately released CommSec’s quarterly State of the States report has highlighted the following features with regards to the performance of the states in terms of national economic rankings:

Top two positions retained by non-mining states – New South Wales (NSW) and Victoria have performed well and are the top two states in terms of economic growth with NSW being the strongest performer. This comes at the back of lead with regards to factors including population growth, equipment investment, retail trade and dwellings start. NSW’s economy is boosted largely by population growth that led to a rise in housing demand. NSW has outweighed others with top positions obtained against five key indicators from a total of eight while Victoria is second on six of the eight indicators. NSW and Victoria reported for economic activity running at 13.5 per cent and 12.4 per cent, respectively, above corresponding average levels of the past decade. FY17 forecast also reveal a healthy economic activity for the states. Victoria did witness headwinds in unemployment, while it has been identified to be the state with the fastest annual economic growth rate in the nation, which jumped up 3.6 per cent over last year.

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Unemployment and construction work (Source: State of the States July 2016 State & Territory Economic Performance Report)

Mining states suffered a blow: Western Australia is down to seventh position, with its performance dropping from the lead in a span of two years while the level of exports has been strong. Unemployment dragged Western Australia at the back of jobless rate at 5.6 per cent, which is a rise of 26.6 per cent than the decade average. Collectively, the indicators including wages growth, inflation along with house price changes have suffered and are short of long term averages in Western Australia. Queensland also fell from fifth to sixth position on the rankings while taking second position on the indicator on dwellings starts.

Construction boom: Construction work was noted to be higher than decades averages in six of the states and territories. The biggest shift came from the Northern Territory that took the lead with construction work over 42.8 per cent above its decade average. This came at the back of activity associated with the gas projects providing solid support while there was a 20.2 per cent drop in the March quarter compared with a year ago period.

Ease in unemployment rates across all states by and large, with some exceptions: Unemployment rate eased in three months for all states except for Queensland. Further, unemployment rates in the ACT were below 4 per cent and this pulled down ACT’s overall position to number three. Similar rates were seen for the Northern Territory which otherwise held top spot for construction work.

Tourism shined for Tasmania: Owing to low population growth, Tasmania sat at the last position overall, however, took a leading spot in tourism. The state is said to get support from the lower Australian dollar given the activity in tourism industry over the recent months.

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