New South Wales has the strongest performing economy, pulling further ahead of Victoria, the latest CommSec State of the States report has revealed.
NSW took out the title for the sixth consecutive quarter, in a report that compared the performance of all the state and territory economies during the final quarter of 2015.
Although the two most populous states – NSW and Victoria – were the strongest, CommSec’s chief economist Craig James said the ACT economy was gaining ground.
“There is a fair gap between New South Wales and Victoria and the other states and territories,” Mr James told the ABC.
“The big improver this time around has been the ACT – it was sixth in the last survey, it’s now equal third this time around with the Northern Territory.”
The economist said growth in NSW, Victoria and the ACT was due to housing development in those regions.
“If more homes are being built, freestanding homes and apartments, it provides additional employment opportunities, it provides opportunities for retail spending and will provide momentum for the economy,” Mr James said.
New South Wales unemployment improved and its population grew above long-term averages, providing “solid momentum” to its economy, he said.
Western Australia came in fifth, followed by Queensland, South Australia and then Tasmania.
The Northern Territory was in for a rocky ride in the next few years as key resource projects were either finished or near completion, Mr James said.
Western Australia continued to slip, with slower population growth and higher unemployment likely to constrain housing market activity, according to the report.
Although Queensland remained in the third tier of economies, unemployment fell to two-year lows in trend terms.
The South Australian job market also improved during the past eight months, which could boost retail spending if maintained, the report found.
The survey ranked Tasmania at the bottom of the economic performance table, blaming this on high unemployment and weakening housing growth.
How the states fared
1. NSW – strength in population growth, weakness in economic growth.
2. VIC – strength in population growth, weakness in equipment spending.
3. NT – strength in construction work, weakness in population growth.
4. ACT – strength in dwelling starts, weakness in construction work.
5. WA – strength in economic growth, weakness in job market.
6. QLD – strength in dwelling starts, weakness in construction work.
7. SA – strength in equipment investment, weakness in dwelling starts.
8. TAS – strength in job market, weakness in economic growth.
– with Kaitlin Thals, ABC and AAP