In a closely fought contest, Queensland moved up from third spot, joining South Australia in second spot. Victoria remains in fourth place, with Tasmania steady in fifth place.
NSW leapfrogged the ACT into sixth from seventh place, with the nation’s capital slipping back to seventh. The Northern Territory remains in eighth spot.
“Overall, economies have slowed in response to higher interest rates and inflation, however Australian states and territories are proving resilient due to a strong job market and solid population growth. As consumers respond to higher borrowing costs and price pressures, the future path will depend on whether the job market can hold up as well as the trajectory of interest rates over the coming months,” Chief CommSec Economist Ryan Felsman said
“Western Australia’s performance across a number of indicators, namely retail spending, unemployment, population growth, housing finance and dwelling starts powered the state to the top of our economic leaderboard for the second quarter in a row. Queensland however is nipping at WA’s heels, having shot up to equal second place alongside South Australia, with solid results across the eight economic indicators and strong economic momentum. As expected, the interest-rate sensitive south-eastern states remained in a tight cluster mid-table.”
Additional state and territory highlights include:
- Western Australia ranks first on retail spending, relative unemployment, relative population growth, housing finance and dwelling starts.
- Queensland is now equal second, up from third place, with solid results across the board. South Australia, now joint second, ranks first on economic growth.
- Victoria remains in fourth place - leading on construction work done - and is in fourth spot on two indicators.
- Tasmania is steady in fifth spot — ranking second on equipment spending — but is held back by lower rankings on other indicators.
- NSW moves up to sixth from seventh position and now ranks fifth on four indicators. The ACT has slipped back to seventh — in that position on four indicators.
- The Northern Territory remains in last place. But the “Top End” has performed better over the past 12 months, ranking first for retail spending and equipment investment when annual growth rates are considered.
Annual growth rates
The State of the States report also compares the annual growth rates of the eight major indicators, enabling comparisons in terms of more recent economic momentum. This quarter’s report showed:
- Resources-focused Queensland and Western Australia both have the strongest annual economic momentum, and Queensland is now in first spot with Western Australia slipping to second.
- There is little to separate the states with Queensland ranked first or second on five out of the eight key economic indicators. Western Australia is top ranked on three indicators.
- The biggest mover is Victoria, which has jumped to third from seventh place in a sign of improvement in underlying economic activity.
- South Australia has ascended to fourth from sixth place.
- The Northern Territory has eased back to fifth from third spot. The ACT and NSW are now in joint sixth position, ahead of Tasmania in eighth spot – all held back by higher borrowing costs and slower population growth.
About the CommSec State of the States Report
The January 2025 edition of the State of the States report uses the most recent economic data available. While population growth data relates to the June quarter of 2024, other data – such as unemployment – is much timelier, covering the month of December 2024, with housing finance figures focusing on the month of September 2024.
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 of Australia (RBA) 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.
