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Masters of Coin: Which State Has the Strongest Economy?

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Victoria remains the fastest growing state economy in the country new official data confirms, bolstered by retail trade, employment and construction work.

For the sixth quarter in a row, Victoria retained its status of the best performing economy according to the latest CommSec rankings.

CommSec's quarterly State of the States report, which is based on eight key indicators compared with the decade average within each state, ranks each Australian state based on pure economic growth terms.

The metrics include economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance and dwelling commencements.


▲ Victoria topped the charts again. Image: CommSec
▲ Victoria topped the charts again. Image: CommSec

Victoria maintained top spot on relative economic growth and over the June quarter lifted 26.6 per cent above its "normal" or decade-average level of output, ahead of NSW, with output 24.7 per cent.

The robust economic standing of the the country's notoriously strong eastern states, are also being tested by Tasmania, jostling up to second position and knocking NSW's economy—which had held top stop from 2014 to mid last year—further down the pecking order.

CommSec analysis revealed a widening gap between the next states, Queensland and South Australia, with Western Australia and the Northern Territory remaining as the weakest performing states.

The nation's sluggish domestic economy has created calls for higher infrastructure spend which has buoyed Victoria, seeing a 25.6 per cent lift above its decade average, thanks in part to a $1 billion budget surplus in its coffers.

NSW construction was next strongest, 23.9 per cent above its decade average, and Tasmania was third.

The CommSec report said that NSW was remained a solid performer in construction but was lagging on relative population growth and dwelling starts.

Tasmania's economy has climbed to second on a national ladder, largely due to strong figures for home building and home buying.

Tasmania ranked first on relative population growth, dwelling starts and equipment investment and second on housing finance as well as seeing annual population growth lifting at its fastest rate in almost three decades.

While Tasmania's population had previously increased naturally, through births and deaths, interstate, intrastate and overseas migration was now driving up the number of residents.

A tourism boom, a surge in inter-state migration, an increase in international students and an undersupply of housing are also contributing to Tasmania's popularity and economic prosperity.

During the mining investment boom Western Australia enjoyed 12 quarters in a row as Australia's top economy, but the state, which has failed to diversify since, is currently amidst its worst set of economic conditions since the 1990s.


Economic growth

StateLevel this quarterCompared with decade average
VIC$430,153m26.6%
NSW$548,457m 24.7%
QLD$400,531m21.1%
ACT$52,057m 20.2%
TAS$38,220m19.3%
WA$332,670m17.2%
NT$32,715m 16.2%
SA$122,302m16.0%
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Housing Finance

StateLevel this quarterCompared with decade average
ACT1,08617.0%
TAS1,02712.9%
VIC14,6737.3%
SA3,4600.2%
NSW14,5461.7%
QLD9,067 -5.8%
WA4,663 -24.2%
NT225-31.1%
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Dwelling starts

StateLevel this quarterCompared with decade average
TAS73414.5%
NSW14,38410.4%
VIC15,2341.4%
SA2,416 -10.7%
ACT929-21.7%
QLD7,283-22.5%
WA3,921-31.4%
NT162-56.8%
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Construction

StateLevel this quarterCompared with decade average
VIC$13,176m25.6%
NSW$15,981m23.9%
TAS$752m14.9%
ACT$884m3.5%
QLD$9,481m -23.5%
WA$5,728m-49.2%
NT$473m-67.6%
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Population Growth

StateLevel this quarterCompared with decade average
VIC2.08% -0.2%
QLD1.77%4.1%
ACT1.66% -12.4%
NSW1.43%2.8%
TAS1.21% 109.3%
WA1.00% -41.2%
SA0.85% -3.1%
NT-0.43%-140.9%
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How is the economy holding up?

The slowdown in annual economy growth to 1.4 per cent—the weakest it has been since the global financial crisis a decade ago—has continued to struggle over recent months.

Household consumption growth slowed in the quarter to 0.4 per cent, and moderated to 1.4 per cent on an annual basis, according to the Australian Bureau of Statistics (ABS).

Recent ABS figures also saw the national unemployment rate lower over September with approximately 14,700 new jobs were added last month after a big gain in full-time jobs of 26,200.

Capital Economics senior economist Marcel Theiliant said the RBA would have breathed a sigh of relief as the unemployment rate dipped however doubts the drop over the month would mark a genuine turning point for the economy.

“We expect global GDP growth to slow further in Q4 and Q1 2020 and to stay soft thereafter.”

“In that environment, business confidence will probably remain subdued and firms will remain reluctant to invest.”

In the meantime, the government is continuing to rely on tax cuts, RBA rate cuts, a weaker Australian dollar and a stabilising housing market to stimulate growth over the next six to twelve months.

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Article originally posted at: https://theurbandeveloper.com/articles/commsec-state-of-the-states