Tasmania back on top: CommSec State of the States

Tasmania is once again the country’s best performing economy, according to CommSec’s State of the States report – a quarterly ranking of economic performance.

A strong job market and more new dwelling builds has put Tasmania back in the number one spot. It is the 11th time in three years that Tasmania has led the country as the best performing economy.

There is little to separate other states in the latest report with Queensland and South Australia equal second, followed by NSW in fourth, Victoria and Western Australia in equal fifth. The ACT has slipped from sixth to seventh, while the Northern Territory remains in eighth position.

The CommSec State of the States report uses the latest available information to provide an economic snapshot of each state and territory by comparing eight key indicators: economic growth, retail spending, equipment investment, unemployment, construction, population growth, housing finance and dwelling commencements.

CommSec Chief Economist Craig James said Tasmania leads the other states and territories on three of the eight indicators with a strong job market, high dwelling starts and solid equipment investment. It is second or third on three indictors: housing finance, economic growth and construction work.

“Australia’s states and territory are all close on the performance indicators. Looking ahead, sectors like construction, education and consumer spending are likely to be supported by high rates of in-bound migration,” Mr James said.

“We anticipate ongoing growth in the Tasmania, Queensland and South Australia economies in the next six months and that these states will remain at the top of the leader board.”

Trend unemployment in Tasmania was 3.8 per cent in March, which is 37.7 per cent below the decade average. Dwelling starts, which are driven in part by population growth, were 17.8 per cent above the decade average in Tasmania.

Despite ranking last, the Northern Territory has recorded the fastest job growth in the 12 months to March 2023, up 5.1 per cent. This provides scope for improvement on consumer spending and housing demand.

State and territory highlights

• Tasmania ranked first on dwelling starts, equipment investment and relative unemployment.
• South Australia ranked first on construction work.
• Queensland ranked first on relative population growth.
• NSW ranked third on retail trade, equipment investment and relative unemployment.
• Victoria ranked first on retail spending.
• Western Australia ranked first on relative economic growth.
• The ACT ranked first on housing finance.
• The Northern Territory ranked fourth on relative economic growth and relative population growth.

Annual growth rates

• Annual changes in economic indicators are useful for measuring economic momentum.
• Of the eight indicators assessed, Tasmania, the Northern Territory and Queensland each led annual changes on two of the eight economic indicators. And the ACT and Western Australia each led on one indicator.
• Notably, when looking across annual growth rates, NSW exceeded the national average on six of the eight indicators. Next best was Queensland, exceeding the national annual growth rate on five of the eight indicators.
• South Australia, Tasmania and the ACT led the national average on four indicators. Western Australia, the Northern Territory and Victoria exceeded the national average growth rate on three indicators.

Note to editors: interviews with Craig James can be requested via the CBA Media team on (02) 9118 6919 or media@cba.com.au.

About the CommSec State of the States Report

The State of the States report uses the most recent economic data available, however while some data relates to the September quarter (population), other data – such as unemployment – is timelier, covering the month of March.

CommSec, the digital broking arm of Australia’s largest bank, assesses the performance of each state and territory on a quarterly basis using eight key indicators. Those indicators include: economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance, and dwelling commencements.

Just as the Reserve Bank uses long-term averages to determine the level of "normal" interest rates, CommSec compares the key indicators to decade averages; that is, against "normal" performance. CommSec also compares annual growth rates for eight key indicators for all states and territories, in addition to Australia as a whole, enabling a comparison of economic momentum.

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