There is little to separate Victoria, Queensland and NSW in the way of economic performance, according to the latest CommSec State of the States report, while Tasmania continues to lag.
For this report, each of the state and territory economies was assessed on eight key indicators including economic growth, retail spending, unemployment and population growth.
For each economy, the latest level of the indicator was compared with the decade average.
The report reveals WA remains the best performing economy, ahead of the Northern Territory, with both economies likely to hold their positions over 2013, largely due to population growth.
WA leads the way on construction work, retail trade, population growth, construction work done and equipment investment. It is also the second strongest on retail trade and housing finance, but finished fifth on dwelling starts.
The Northern Territory is the second strongest economy, with top rankings on overall economic growth and unemployment, and second strongest on retail trade and dwelling starts.
Meanwhile, there is little to separate the three largest states: Victoria, Queensland and NSW.
Victoria is supported by its housing sector but is losing momentum, the report said, while Queensland is strongest on construction work and equipment.
However, Queensland’s performance is restrained by a historically high reading on unemployment, while NSW benefits from having historically low unemployment.
In South Australia, population growth is well above its longer-term average, potentially boosting housing demand, non-residential and engineering investment, and retail spending.
Tasmania, on the other hand, lags all other economies on four of the eight indicators. They are overall economic growth, retail trade, population growth and construction work done.
According to CommSec chief economist Craig James, the last quarter was a period of consolidation in the economic performance rankings, with few changes.
“Western Australia has held its position at the top of the economic leader-board from the Northern Territory,” James said in the report.
“[However,] the Northern Territory… has potential to overtake Western Australia at the top of the leader-board, especially with faster growth in investment and population growth.”
James said Victoria, Queensland and NSW remain close in economic performance, so it’s uncertain which state will break away in coming months.
Things are looking up in South Australia as a result of population growth, James said. And while the Tasmanian economy is still struggling, there is hope.
“There will be rebuilding activity in some areas following recent bushfires. Equipment investment is still above decade averages although spending growth has weakened,” James said.
“And the unemployment rate has flattened near 7% over the past year.”