STATE OF THE STATES 2014

How are Australia’s states and territories performing? Each quarter CommSec attempts to find out by analysing eight key indicators: economic growth; retail spending; equipment investment; unemployment; construction work done; population growth; housing finance and dwelling commencements.

Just as the Reserve Bank uses long-term averages to determine the level of “normal” interest rates; we have done the same with the economic indicators. For each state and territory, latest readings for the key indicators were compared with decade averages – that is, against the “normal” performance.


NATIONAL INSIGHTS

Brought to you by the CommSec Economics Team

There has been no change in the rankings of States and Territories on the economic performance table. There are basically three groups. Western Australia remains Australia’s best performing economy from the Northern Territory and NSW. The next grouping is Queensland, Victoria and the ACT. And the final grouping is South Australia and Tasmania.

Western Australia leads the way on retail trade and housing finance. The Northern Territory leads the way on economic growth, business investment, unemployment and construction work. And NSW is strongest on population growth and dwelling starts.


STATE BY STATE
BREAKDOWN

+ Home lending

- Unemployment

+ Economic growth

- Home lending

+ Business investment

- Population growth

+ Population growth

- Construction work

+ Home lending

- Economic growth

+ Construction work

- Unemployment

+ Job market

- Business Investment

+ Retail spending growth

- Various

Western Australia

An overview of WA

Key Categories This quarter Vs decade avg.
Dwelling commencements 7397 +29.9%
Unemployment 5.0% +20.3%
Population Growth 2.9% +10.7%
Economic Growth $52203m +24.9%
Equipment investment $2312m +5.8%
Housing Finance 7757 +9.5%
Retail spending $7951m +19.0%
Construction work $13994m +54.2%

Insight into WA

Western Australia leads the way on retail trade and housing finance. The Northern Territory leads the way on economic growth, business investment, unemployment and construction work. And NSW is strongest on population growth and dwelling starts. Apart from top rankings on retail trade and housing finance, Western Australia is number two on economic growth and construction work done and third on business investment, population growth and dwelling starts.


Northern Territory

An overview of NT

Key Categories This quarter Vs decade avg.
Dwelling commencements 430 +15.6%
Unemployment 3.9% -9.1%
Population Growth 1.7% -6.9%
Economic Growth $6993m +35.9%
Equipment investment $227m +35.5%
Housing Finance 364 -17.5%
Retail spending $746m +18.1%
Construction work $1690m +97.3%

Insight into NT

The Northern Territory remains the second strongest economy, behind Western Australia. The Northern Territory leads the way on economic growth, business investment, unemployment and construction work. Northern Territory is second ranked on retail trade but is also the weakest on housing finance. The Northern Territory economy remains close to Western Australia, but population growth lags other states and territories and that is checking activity in home purchase and construction.


New South Wales

An overview of NSW

Key Categories This quarter Vs decade avg.
Dwelling commencements 12301 +44.9%
Unemployment 5.6% +6.9%
Population Growth 1.5% +30.8%
Economic Growth $115290m +13.2%
Equipment investment $3402m +3.9%
Housing Finance 15116 +3.5%
Retail spending $21046m +14.4%
Construction work $10886m +16.1%

Insight into NSW

New South Wales remains the third strongest economy. NSW leads other states and territories on population growth and dwelling starts. NSW is third strongest on unemployment and is fourth on the other five economic indicators. The NSW economy certainly has momentum, especially in terms of population growth and therefore home building. NSW is also still “playing catch-up” after under-building for a number of years. So demand for homes is still above supply.


Queensland

An overview of QLD

Key Categories This quarter Vs decade avg.
Dwelling commencements 9338 +6.3%
Unemployment 6.3% +25.5%
Population Growth 1.7% -21.1%
Economic Growth $77602m +15.5%
Equipment investment $2867m +6.3%
Housing Finance 10110 -6.5%
Retail spending $14052 +14.8%
Construction work $14714m +45.9%

Insight into QLD

Queensland remains the fourth strongest economys. Queensland is second strongest on business investment and third strongest on three indicators – economic growth, retail trade and construction work done. But on the other end of the scale, Queensland is fifth on housing finance, sixth on dwelling starts and seventh on population growth. The bad news is that population growth has slowed for the past five quarters.


Victoria

An overview of VIC

Key Categories This quarter Vs decade avg.
Dwelling commencements 13424 +15.5%
Unemployment 6.4% +21.0%
Population Growth 1.9% +14.6%
Economic Growth $87472m +10.8%
Equipment investment $2620m -5.1%
Housing Finance 13634 +5.9%
Retail spending $16686m +12.2%
Construction work $8750m +9.7%

Insight into VIC

Victoria remains the fifth strongest economy with little change in its relative position against other states and territories in the past quarter on any of the key indicators. Victoria is second strongest on population and housing finance, fifth on four indicators and sixth on economic growth. Relatively high unemployment is also serving to cap growth in the Victorian economy although high population growth is underpinning home building.


Australian Capital Territory

An overview of ACT

Key Categories This quarter Vs decade avg.
Dwelling commencements 1121 +32.3%
Unemployment 3.6% +5.5%
Population Growth 1.6% +4.3%
Economic Growth $12731m +11.7%
Equipment investment $90m -17.1%
Housing Finance 809 +4.2%
Retail spending $1213m +8.7%
Construction work $690m +2.8%

Insight into ACT

The ACT economy is the sixth best performing economy. While the Territory is second strongest on dwelling starts and unemployment, it is the weakest on business investment and seventh on construction work. The ACT is third on housing finance, fourth on population growth, fifth on economic growth and sixth on retail spending. Low unemployment is a clear strength for the ACT economy but weak confidence is constraining retail and business spending and future economic performance.


South Australia

An overview of SA

Key Categories This quarter Vs decade avg.
Dwelling commencements 2740 +1.3%
Unemployment 7.0% +28.9%
Population Growth 0.9% -3.9%
Economic Growth $23786m +7.9%
Equipment investment $611m -8.4%
Housing Finance 3448 -9.9%
Retail spending $4378m +5.5%
Construction work $2480m +15.1%

Insight into SA

There remains a sizeable gap in the rankings from sixth placed ACT to seventh-placed to South Australia and then another gap to eighth-based Tasmania. South Australia generally is sixth or seventh on most of the key indicators although it is fifth on both construction work and population. South Australia is lacking a growth driver, especially as a number of public sector construction projects have been completed or are nearing completion. The South Australian unemployment rate was the highest in the nation in June.


Tasmania

An overview of TAS

Key Categories This quarter Vs decade avg.
Dwelling commencements 428 -35.4%
Unemployment 7.4% +23.4%
Population Growth 0.3% -56.3%
Economic Growth $6931m +4.5%
Equipment investment $165m -8.7%
Housing Finance 857 -14.1%
Retail spending $1344m +6.3%
Construction work $533m -7.8%

Insight into TAS

Tasmania remains at the bottom of the Australian economic performance table. Tasmania lags other economies on four of the eight indicators – economic growth, construction work, population growth and dwelling starts. Tasmania is seventh on the other indicators. But there are some encouraging signs in Tasmania including economy-leading retail trade growth and trend improvement in the jobless rate.