CommSec State of the States
October 2019

Overall Results

• How are Australia’s states and territories performing? Each quarter CommSec attempts to find out by analysing eight key indicators: economic growth; retail spending; equipment investment; unemployment; construction work done; population growth; housing finance and dwelling commencements.

• Just as the Reserve Bank uses long-term averages to determine the level of ‘normal’ interest rates; we have done the same with key economic indicators. For each state and territory, the latest readings for the key indicators were compared with decade averages – that is, against the ‘normal’ performance.

• The ‘State of the States’ report also includes a section comparing annual growth rates for the eight key indicators across the states and territories as well as Australia as a whole. This enables another point of comparison – in terms of economic momentum.

• Victoria remains the best performing economy. Tasmania has moved past NSW into second spot but there is little separating the states. The ACT is solidly in fourth position.

• Then there is a gap to Queensland and South Australia. And in the fourth grouping is Western Australia and the Northern Territory.

• Victoria continues to benefit from solid population growth and a strong job market.

• Tasmania is now in second spot with strength in the building and purchase of homes.

• NSW remains consistently strong across all indicators but lost one position on dwelling starts in the quarter.

• The ACT is in fourth spot, supported by a strong job market and solid demand for homes.

• Queensland remains in fifth spot from South Australia and both are having to contend with relatively high jobless rates.

• Western Australia remains in seventh position, ahead of Northern Territory.

Looking Ahead

• On the eight indicators used for comparison, Victoria is now solely at the top of the rankings. Tasmania has crept past NSW into second spot. But there is little to separate the latter two economies.

• Over the quarter Victoria was unchanged in its rankings for all eight indicators.

• NSW fell two places – on population growth and dwelling starts. By comparison, in net terms Tasmania gained one position. Tasmania lifted one spot on both dwelling starts and unemployment but fell one spot on housing finance.

• The ACT is solidly in fourth position. The ACT lost one spot on each of construction work, population growth and dwelling starts. The ACT lifted one spot on housing finance.

• Queensland remains in fifth position in the performance rakings. Queensland gained one spot on population growth but lost one on unemployment.

• South Australia remains in sixth position in the rankings. South Australia lost two positions on economic growth and one position on dwelling starts. But it gained one position on each of population growth, unemployment and construction work.

• Western Australia stays in seventh spot but the state is starting to narrow the gap with Queensland and South Australia, Western Australia has lifted two spots on economic growth and lifted one spot on unemployment.

• Northern Territory remains in eighth position. There were no changes in relative rankings on the eight indicators. But encouragingly the Northern Territory is experiencing a lift in equipment spending from a low base.


• Each of the states and territory economies were assessed on eight key indicators: economic growth; retail spending; equipment investment; unemployment, construction work done; population growth; housing finance and dwelling commencements.

• The aim is to find how each economy is performing compared with “normal”. And just like the Reserve Bank does with interest rates, we used decade-averages to judge the “normal” state of affairs. For each economy, the latest level of the indicator – such as retail spending or economic growth – was compared with the decade average.

• While we also looked at the current pace of growth to assess economic momentum, it may yield perverse results to judge performance. For instance retail spending may be up sharply on a year ago but from depressed levels. Overall spending may still be well below “normal”. And clearly some states such as Queensland and Western Australia traditionally have had faster economic growth rates due to historically faster population growth. So the best way to assess economic performance is to look at each indicator in relation to what would be considered ‘normal’ for that state or territory.

• For instance, the trend jobless rate in the ACT of 3.5 per cent is the lowest of all economies. And this jobless rate is 11 per cent lower than its ‘normal’ or decade-average rate. However Victoria’s unemployment rate, while higher at 4.8 per cent, is actually 14.4 per cent below its decade average, putting it ahead of the ACT on this indicator. And the NSW trend jobless rate is 4.5 per cent, 13.4 per cent below its decade average.

• Except for economic growth, trend measures of the economic indicators were used to assess performance on all measures rather than more volatile seasonally adjusted or original estimates. Rolling annual nominal data was used to assess economic growth.

Published by Craig James, Chief Economist, CommSec