According to CommSec’s State of the States report, a quarterly ranking of economic performance, Tasmania also has a strong job market and relative strength in home loan demand.
But population growth lags other state and territory economies, restraining momentum.
There is little to separate Tasmania from NSW. South Australia is now in third position, followed by Queensland, Western Australia, Victoria, the ACT and the Northern Territory.
The report uses the latest available information to provide an economic snapshot of each state and territory by comparing eight key indicators: economic growth, retail spending, equipment investment, unemployment, construction, population growth, housing finance and dwelling commencements.
Tasmania is in top position on dwelling starts, with the state just 0.9 per cent below the decade average for the March quarter.
South Australia was its closest rival, with that state’s dwelling starts 8.4 per cent down on the decade average for the same time period.
Tasmania also leads the way in equipment investment which is real spending on new plant and equipment in trend terms.
In the March quarter, equipment investment in Tasmania was up 23.9 per cent on the decade average, ahead of NSW (up 13.5 per cent) and Western Australia (up 12.9 per cent).
CommSec Chief Economist Craig James said Tasmania leads the other states and territories on two of the eight indicators but it was closely followed by NSW.
“There is little to separate Tasmania from NSW in terms of economic performance. And NSW has solid momentum on its side, leading the ranking of annual growth rates for the eight indicators,” he said.
“In fact Tasmania faces challenges from at least three economies – NSW, as well as South Australia and Queensland.
“Notably Tasmania ranks eighth on relative population growth – pointing to slower economic activity ahead.
“There are encouraging signs for the Western Australian economy. Western Australia leads other states and territories on annual growth rates for two of the eight indicators.
“This points to the potential to ride up the economic performance rankings over the next few years.”
Western Australia leads the way on relative economic growth, which was up 44.1 per cent on its decade-average level of output in the year to March 2023.
Queensland followed in second place, up 36.3 per cent.
The ACT is the strongest for retail spending, jumping from fourth to first spot based on real spending rising 15.3 per cent in the March quarter on its decade-average level.
Victoria dropped from first spot to second, with spending 14.8 per cent above its normal levels.
NSW has the strongest jobs market with trend unemployment sitting at 3.1 per cent in June 2023, which is 37.8 per cent below the decade average.
Tasmania is now in second place with a jobless rate of 3.8 per cent, which is 36.7 per cent down on the decade average.
Victoria has the highest total of real value residential, commercial and engineering work completed in the March quarter.
Construction work done was 19.3 per cent above the decade average in Victoria, followed by South Australia, which was up 14.9 per cent.
South Australia leads the way in population growth, with its 1.58 per cent annual growth rate up 64.1 per cent on the decade average for the year to the December quarter 2022 (most recent figures available).
Adelaide, in South Australia had the highest annual inflation rate in the March quarter at 7.9 per cent, ahead of Brisbane at 7.4 per cent.
The official Wage Price index in the year to the March quarter was strongest in WA and Tasmania at 4.1 per cent.
Nationally home prices fell 5.3 per cent over the year to June, but that didn’t stop WA recording an annual rise of 2.7 per cent.
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