Victoria Takes Top Spot from NSW as Nation’s Top Economy

Victoria has taken the title of Australia's best performing economy, overthrowing New South Wales which is now in second place, according to Commsec’s state of the state market report.

For the first time in three quarterly surveys Victoria has solely taken the top spot on the overall economic performance rankings, thanks to the strength of the state’s economic growth, retail trade, the job market and construction work.

While New South Wales, which had previously jointly shared the top spot with Victoria, remains consistently strong across all indicators.

Each quarter CommSec analyses eight key indicators: economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance and dwelling commencements.

When looking across growth rates for the states and territories, Victoria exceeded the national-average on seven of the eight indicators, with Victoria’s lowest ranking, in population growth, ranking in fourth.

Economic activity in Victoria in the March quarter was 26.6 per cent above its “normal” or decade-average level of output, a slight lead on New South Wales, with output 25.1 per cent above the “normal” level.

Victoria has the strongest job market, with unemployment in Victoria at 4.7 per cent, a rate 16.5 per cent below the decade average.

Tasmania is now solely in third spot on the performance rankings with strength in the building and purchase of homes.

The ACT took the fourth spot, losing ground to Tasmania on housing indicators.

Queensland is now in fifth position in the performance rankings. The report said the Sunshine state continues to show improvement over the past three quarters.

Queensland’s stronger population growth boosted retail spending which is now growing at a 5.5 per cent annual trend rate. It also ranked third on relative economic growth and population growth.

Although the state's construction work and dwelling starts dropped 21.7 per cent and 9.9 per cent. And Queensland's housing finance dropped 10.8 per cent.

The report note there is little to separate the economies of Queensland and South Australia, which took sixth position.

Western Australia remains in seventh position, ahead of Northern Territory which underperformed the national result on all but one indicator.