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(Australian Associated Press)
NSW still has the best performing economy in Australia, and Tasmania is the big improver, according to CommSec’s latest quarterly State of the States report. CommSec says the nation has a two-tiered economy, with NSW, Victoria and the ACT in the top tier, and the others in the second tier.
NSW 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 ACT may challenge over the coming year.
Victoria keeps second spot, leading on population growth and housing finance. Mr James says the outlook for the Victorian economy remains encouraging.
3. AUSTRALIAN CAPITAL TERRITORY
The ACT 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 Mr James.
Tasmania is the big improver, lifting from seventh place to fourth, with improving population growth boosting housing demand and supporting the job market.
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 Mr 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. Mr 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 Mr 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.