Victoria has taken the lead as Australia’s best performing economy, frog leaping New South Wales and climbing from sixth place last quarter.
The CommSec State of the States report has ranked the state and territories economic performance based on factors like growth, retail spending, unemployment, construction and population growth.
Last quarter Tasmania took out the top spot, but Victoria had improved its ranking with solid retail spend, business investment and a construction boom but there’s a warning from CommSec Chief Economist Craig James.
“Economic activity in Victoria in the June quarter was 7.7 per cent above its four-year average level of output and equipment investment was at record highs as well – up 19.7 per cent on the decade average,” James said.
“While the lift from fifth to first is surprising, we knew coming into this quarter there was little to separate the economic performance of the states and territories. We expect Victoria to face challenges from the other economies in the period ahead.”
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The Daniel Andrews-led government faced harsh criticism for how the Labor party had led Victoria’s government, particularly as cost-of-living pressures built following a harsh approach to controlling the impacts of the COVID-19 pandemic.
Current deputy premier Ben Carroll said the report’s findings are a testament to debt mitigation strategy.
“Goes to show that a lot of the investments we’ve been making over a long period are really showing and paying dividends,” Carroll said.
Which is the best performing economy in Australia?
Victoria (6)
South Australia (3)
New South Wales (2)
Queensland (4)
Western Australia (5)
Tasmania (1)
Australian Capital Territory (7)
Northern Territory (8)
State highlights and lowlights
Victoria
Strength: Economic growth and construction
Weakness: Population growth
South Australia
Strength: Unemployment
Weakness: Retail spending
Tasmania:
Strength: Equipment spending
Weakness: Population growth
Western Australia
Strength: Population growth
Weakness: Construction work done
Queensland
Strength: Housing finance
Weakness: Equipment spending
New South Wales
Strength: Economic growth
Weakness: Housing finance
Australian Capital Territory
Strength: Retail spend
Weakness: Population growth
Northern Territory
Strength: Population growth
Weakness:Retail spending
“Overall, the economic performances of Australian states and territories are being supported by a solid job market and strong population growth at a time of rising interest rates,” the State of States report found.
“Australia’s state and territory economies are slowing in response to higher borrowing costs and price pressures. The future path of economies will depend on the response of inflation to higher interest rates”
Commonwealth Bank, along with the other big four banks – Westpac, ANZ and NAB – have all predicted a hike in in the cash rate when the Reserve Bank of Australia meet again next week.
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