“The strength of Australia’s state and territory economies continues to be driven by a resilient job market and solid population growth, underpinning economy-wide demand. However, an extended period of elevated interest rates to counter persistent inflation is pressuring consumers and slowing economic momentum. The path forward will largely depend on the ongoing strength of the labour market, trajectory for monetary policy and China’s economic recovery,” Chief CommSec Economist Ryan Felsman said.
“Western Australia’s robust economic fundamentals, especially its low unemployment and strong population growth has fuelled nation-leading consumer spending, pushing the state to the top of the leaderboard for the first time in a decade. WA is well positioned for sustained future performance; however, the competition remains intense, particularly among the top three states with Queensland moving quickly up the rankings.”
Additional state and territory insights include:
- Western Australia leads the nation on retail spending and population growth and has the strongest job market
- South Australia ranked first on real economic growth and dwelling starts.
- Queensland is now in top spot for home lending (with the value of home loans up 39 percent on the long-term average)
- Victoria led on construction work done, up 13.5 per cent on the decade-average level.
- Tasmania claimed the top spot on equipment investment, which is 36.4 percent above the decade average.
- The ACT is ranked second on two indicators, economic growth and retail spending.
- Rate-sensitive NSW is ranked seventh on three indicators - retail spending, equipment investment, and dwelling starts – held back by higher borrowing costs.
- The Northern Territory is ranked eighth on five indicators - economic growth, retail spending, construction work, home lending and dwelling starts.
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 economic momentum. This quarter’s report revealed:
- Western Australia has the strongest economic momentum for the fourth survey in a row.
- Queensland is second, ranking first on relative unemployment and housing finance.
- The Northern Territory has jumped to third place from eighth. The ‘Top End’ now ranks second on three of the key economic indicators, including retail spending, business investment and relative population growth.
- The ACT slips from third to fourth position ahead of Tasmania in fifth. South Australia lifts from seventh to sixth spot, with Victoria slipping from fourth to seventh position. NSW is now in eighth place after being sixth in the previous report.
About the CommSec State of the States Report
The October 2024 edition of the State of the States report uses the most recent economic data available. While population growth data relates to the March quarter of 2024, other data – such as unemployment – is much timelier, covering the month of September 2024, with housing finance figures focusing on the month of August 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.
