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WA surging ahead in battle of states

With riches flowing from its many resource projects, Western Australia is far and away Australia’s best performing economy.

So much so, that it is probably more appropriate to look at two concepts to measure the national economy: Australia; and Australia less Western Australia’s contribution.

Every quarter, CommSec looks to find out which state or territory is performing the best by analysing eight key indicators: economic growth; retail spending; equipment investment; unemployment, construction; population growth; housing finance and dwelling commencements.

In six of these eight criteria Western Australia comes out on top, leaving a lot of daylight between the booming state and the next best performing location in Australia.

Western Australia has the strongest job market in the nation with a trend jobless rate of 3.7 per cent, the lowest in 3½ years as well as being 15.7 per cent below its decade average. The centre of a once in a generation mining boom, WA’s economic output is around 30 per cent higher than the state’s decade average level of output.

Related: Mining boom to slow, affect planned surplus: report

ACT, Victoria, Queensland and Northern Territory are in the next grouping of performing states, and then there is a break to NSW and South Australia and then another gap to struggling Tasmania.

Related: Mixed bag for ACT economy

Tasmania is lagging noticeably behind all other location’s economies on five of the eight indicators. Key problems facing the island economy are weak population growth and rising unemployment which are restraining retail spending and overall economic growth.

State vs State

#1 Western Australia
Western Australia is in strong shape, coming out on top in six of the eight indicators. The golden state’s worst results were third for housing finance and fifth for dwelling starts.

#2 ACT
The ACT remains the second strongest economy, benefiting from low unemployment and solid population growth. The housing market is losing momentum but the Territory government has trimmed taxes in an attempt to counteract weaker public service jobs.

#3 Northern Territory
Northern Territory has lifted from seventh to third position, underpinned by new resources projects. The significant scale of the huge $34 billion Inpex liquefied natural gas project clearly has changed fortunes for this relatively small economy.

#4 Victoria
The Victorian economy has slipped from third to fourth position overall and it is also weathering a downturn in the housing market together with weakness in the manufacturing sector.

#4 Queensland
The Queensland economy is now equal fourth, benefitting from rebuilding work after the floods as well as firm activity in resource regions of the state. But the housing market remains weak, restrained by below-average population growth.

#6 NSW
There has been no improvement in the performance of the NSW economy in relative terms compared with other state and territory economies. While unemployment is low and population growth is above long-term averages, this isn’t translating into home construction with its very significant multiplier effects.

#7 South Australia
South Australia has lost ground, but largely because other economies are performing relatively better. South Australia didn’t excel on any of the indicators, but it didn’t fail either.

#8 Tasmania
Tasmania is under performing all other state and territory economies and arguably is the number one candidate for any regional income redistribution as the Federal Government seeks to share the benefits of the mining boom across the broader Australian economy.




Related: Dollar hits new high against euro