NSW takes the number one spot in economic rankings
There’s good news for residents of New South Wales as the state reaches number one in Australia’s economic rankings.
So what indicators have meant NSW to become the nation’s best-performing state economy for the third quarter running? With a strong population growth combined with a dramatic rise in housing construction and an increase in consumer spending, this has led NSW to gain the number one spot.
According to the State of the States report compiled by CommSec, NSW took the number one spot off of WA back in October 2014. During the mining boom, WA took the limelight, but today has fallen to third place, behind the Northern Territory which now stands in second position.
WA might not last in third position for much longer as Victoria; currently in fourth position is starting to close the gap and Queensland sits tight in fifth place.
The purpose of this report by CommSec is to assess relevant factors for each state. It uses eight key factors which include population growth, housing finance and dwelling commencements, economic growth; unemployment, retail spending, construction work and also equipment investment. The latest level of each indicator is then compared with the state’s overall decade average.
The latest report for the quarter shows that NSW received the greatest rankings for housing starts, retail trade and population growth. It scored second place for business investment as well as for housing finance. Construction work and unemployment placed NSW in fourth position whilst economic growth came in fifth.
One of the main factors on NSW’s side is the strength of the property market. With the help of a growing population, property prices have escalated upwards which in turn brings in a greater demand for new housing, especially more affordable housing. Population numbers has grown by 17% (year to September 2014) whilst new housing starts has almost doubled (December quarter) and is above the decade average.
Trust has also grown as consumer spending has increased by 17% (December quarter). This has probably helped by the growth of employment which grew by 26,000 in NSW within March, of which 11,200 full time jobs were created according to the Bureau of Statistics. The number of unemployed people in NSW fell by 8,600 in March to 231,800 unemployed people, whilst the unemployment rate has been at or below the national average for 16 consecutive months, now sitting at 6.1%.
Overall, NSW has improved its position on housing finance and dwelling starts and the outlook for the state economy looks healthy. The strong population growth has meant that home construction has had to shift into gear to tackle the dwellings shortage.
We will have to wait until next quarter to see if New South Wales holds on to its lead and whether WA slips further down the rankings.
Published on 22nd of April 2015 by Marty Stanowich