State of the States report shows WA's lead narrows
CommSec's quarterly State of the States report, a detailed analysis of each state's economic performance based on eight key indicators, has found that Western Australia has given up some of its lead over other states, with population growth slowing, causing a knock-on effect in the housing sector.
While still lower than the other states, unemployment in WA has also drifted up, although commercial and engineering building remains high, investment is strong and the state still boasts the strongest overall economic growth.
The ACT was the outstanding performer this quarter, with housing activity, construction and economic growth all above average. Unemploymen in the ACT is low, and workers there are doing best in terms of real wage gains. The only weak areas in the ACT are retail spending and private business’ spending on machinery.
There is less to differentiate the performances of the other states:
Victoria leads the states in the housing market, with dwelling starts 20% above decade averages and housing lending also rising. On the downside, Victorian unemployment is slightly above decade averages, compared to the other states.
South Australia is experiencing historically high population growth, spurring activity in sectors like construction, which is a massive 47% above decade averages. Annual growth in construction is up 20%, second only to the ACT.
The Northern Territory recorded strong retail spending over the quarter, with a very low unemployment rate of 3.1% continuing to buoy its economy. Areas of weakness include construction work and housing finance.
New South Wales, while being dragged down by slow dwelling starts, is still a major improver, due to above-average population growth and stronger business investment. It outperforms the other states in business investment in equipment and machinery.
Tasmania continues to enjoy relatively low unemployment and greater-than-average dwelling starts. However, it is comparatively weak in business investment and retail spending.
In Queensland, building and construction activity have been affected by sluggish population growth, which is at a historic low. On the positive side, business investment in plant and equipment is 28% above longer-term averages, and retail spending was relatively strong. Reconstruction after the state’s string of natural disasters will definitely give construction activity a boost over the coming months.