NSW retains top spot in CommSec July Report
According to the July 2016 CommSec State of the States Report, NSW has retained top spot as the best performing economy, followed by Victoria, which has moved slightly further away from NSW. However, both states are maintaining a healthy lead over the other Australian states and territories.
Sitting in third position is the ACT which has seen an improvement in its economy over the quarter, whilst the Northern Territory remains in fourth place, followed by South Australia in fifth (previously seventh place. However, the Queensland economy has moved down from fifth to sixth position, as does Western Australia (sixth to seventh position), whilst Tasmania ranks at the bottom of the table.
The CommSec State of the States Report analyses eight key indicators every quarter to determine how each state and territory in Australia is performing. These eight key indicators include economic growth, retail spending, equipment investment; unemployment, construction work done, population growth; housing finance and dwelling commencements.
To understand how each state and territory is performing, we take a closer look.
New South Wales During this quarter, NSW has held on to its top spot on equipment investment, population growth, retail trade and dwelling starts as well as adding economic growth. However, NSW did fall to second place on unemployment. Construction work in NSW improved and has been ranked third this quarter whilst housing finance fell from its second spot to third.
Economic activity in NSW is 13.5 per cent above its ‘normal’ or decade-average level of output, whilst retail spending was 17.1 per cent above decade-average levels in the March quarter. As well as solid activity in the housing sector, lower unemployment and higher home prices are also supporting retail spending.
In terms of population growth, this is an extremely important driver of the whole economy and NSW has the second highest annual growth rate in Australia at 1.40 per cent, which is 7 per cent above the decade average.
NSW holds onto the title of the strongest in the nation for new home construction, with starts reaching nearly 77 per cent above decade averages.
Victoria Victoria remains in a solid second place this quarter and ranks second on a number of indicators including economic growth, population growth, retail trade, business investment, construction work and housing finance. However, in terms of unemployment, Victoria has fallen from second to fourth place.
Victoria has the second strongest economy activity with an output 12.4 per cent higher than the decade average level of output. Victoria also has the fastest annual economic growth rate in the nation, up by 3.6 per cent on a year ago and sits ahead of NSW (up 3.5 per cent).
Retail spending was also 14.5 per cent above decade-average levels, which again is supported by home building and the strength in employment.
Victoria continues to record the strongest annual population growth, with Victoria’s population 1.87 per cent higher than this time last year. The growth rate also sits at 5.6 per cent above the ‘normal’ or decade-average level.
ACT In third place is the ACT which has seen considerable improvement this quarter. The ACT ranks top on housing and finance and third for economic growth, unemployment and population growth. Housing finance is also 26.2 per cent on a year ago.
Northern Territory The Northern Territory retains its fourth spot and also remains its number one rankings for construction work done and also ranks best on unemployment. In spite of this, the economy is starting to lose momentum and has ranked bottom for population growth, business investment and housing finance. Retail trade ranked in sixth place.
South Australia For South Australia, the economy has seen some improvement and has moved up the rankings from sixth to fifth spot. South Australia ranks in the middle for population growth and housing finance and fifth on economic growth. However, it ranks bottom for retail trade.
Queensland Queensland has fallen in rankings from fifth to sixth spot on the economic performance rankings. Even though it ranks bottom on construction work and seventh for economic growth and unemployment, it does rank second for dwelling starts.
Queensland has recorded dwelling starts of 42.3 per cent above decade averages and has replaced Victoria in second spot.
Western Australia Western Australia continues to fall in rankings and now sits in seventh position. Interestingly, WA has moved from number one spot to seventh in just two years and the slow down in the mining industry contributes to this factor. Even though WA is third on retail trade and ranks middle for construction work, WA is struggling on unemployment and ranks bottom of the table for this, whilst ranks seventh on business investment, population growth and housing finance.
Tasmania Tasmania sits at the bottom of the pack in eighth position where it ranks last on dwelling starts and economic growth, but ranks fifth on four other indicators.
The future Looking ahead, NSW is likely to continue to hold on to its number one spot, helped by its strong population growth which is above long-term averages, spurring on momentum in the economy. Victoria also has a solid population growth and holds a solid hold on its second position.
Even though Queensland has fallen down the rankings, the lower Australian dollar will support agricultural exports as well as the tourism sector in the upcoming months. Compared to Sydney and Melbourne, Brisbane remains much more affordable when it comes to purchasing property and is becoming a popular spot for investment.
To learn more about each of the economies or more about the property market in Sydney, Melbourne or Brisbane, get in touch with iBuyNew today. Our expert Property Consultants are able to assist you with any enquiries that you may have. Speak to us today by calling 1300 123 463.
Published on 27th of July 2016 by Marty Stanowich