Victorian economy still strongest in Australia.


30th January, 2020

Analysis: Victorian economy strongest in Australia as national employment rates hold

CommSec’s quarterly ‘State of the States’ report was released this week, showcasing a thriving Victorian economy, a concerning South Australia, and a ‘steady as she goes’ job market.

For the past eleven years, Commonwealth Securities (CommSec) has been releasing a quarterly analysis that measures eight key indicators across each individual Australian state, ranking the states against each other – the resulting analysis is dubbed the State of the States report.

The eight key indicators that the report measures include: economic growth, retail spending, equipment investment, unemployment, construction, population growth, housing finance and dwelling commencements.

In this report, covering the September 2019 quarter, CommSec found the race to the top of the economic ladder to be as tight as ever, with only very slight overall economic performance differences between Victoria, Tasmania and NSW.

Whether this is considered good news or not for small business owners will depend on how they’ve been faring in recent years. For new business starters, it may give some insight into which areas of the country can offer the more stable business environment at the moment.

Notwithstanding the bottleneck like results, the report showed that Victoria maintained its position held since July 2018 as Australia’s best performing state overall.

Economic strengths and weaknesses – state by state

While there were many different findings that emerged from the report, here is a brief overview of the way things currently stand for each state, after considering the report’s final analysis:

1. Victoria

The September 2019 quarter saw Victoria sitting at the top of four out of eight key indicators, maintaining its number one spot on the overall economic performance list.

The state showed particularly good signs in the construction work space, but an overall weaker performance in housing finance.

2. Tasmania

To its credit, the Apple Isle came in at a very convincing second place, topping both the dwelling starts (new residential builds) and population growth charts.

Tasmania showed particular strength in population growth but seemed to be on the decline on the overall economic growth front.

3. New South Wales (NSW)

NSW landed third position overall, impressively appearing in either second or third position in six of the eight key indicators.

The state finished the year with promising construction work statistics, but its relative population growth wasn’t as strong as the rest of its indicators.

4. Australian Capital Territory (ACT)

The ACT didn’t scrub up too badly, with its overall economic growth ranked fourth best in the country.

The nation’s capital was ranked number one for its housing finance performance, but its economy appeared to be having a rough time based on its relative economic growth performance levels.

5. Queensland

While things seemed to be relatively steady, CommSec’s report identified some worrying signs for the Sunshine State.

One of the only positive signs to emerge for Queensland was that it ranked second strongest in relative population growth, but appeared to be doing it tough with most other categories – especially its investment into equipment.

6. South Australia (SA)

SA dragged its way across the 2019 finish line, with the report identifying some fairly sluggish numbers for the country’s mid-south region.

Adding salt to the wound, the state finished the year at the bottom of the economic growth chart. That said, the state ranked third in relative population growth – growing at its quickest rate in four years.

7. Western Australia (WA)

Performance levels in the country’s west were far cry from stellar, with WA remaining seventh on the state economic performance ladder.

Nevertheless, WA did manage to lift two spots in economic growth and one spot in equipment investment – narrowing the gap between it, SA and Queensland and making a convincing a case for a potential takeover in 2020.

8. Norther Territory (NT)

Unfortunately, the story of the September 2019 quarter remains much of the sorry-same for the country’s north, with NT coming in last on the list of overall economic performance.

On a more positive note, the report did show that the state remained ahead of SA in relative economic growth and reported improvements in NT’s equipment investment as well.

CommSec’s Chief Economist Craig James described the report’s findings as “steady as she goes”, and in the media statement that was released together with the report, he expressed feelings of encouragement regarding the improvements shown in the nation’s job market.

The full report can be accessed here.