Western Australia remains the nation’s best performing economy but the Northern Territory is a close second.
The Top End is leading the way when it comes to economic activity, due to strong growth in construction, according to CommSec’s quarterly State of the States report.
South Australia and Tasmania were the weakest performing states, while NSW came in third, followed by Queensland in fourth place and Victoria in fifth.
Every three months, CommSec uses eight key indicators to rank the states and territories – economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance and dwelling commencements.
CommSec chief economist Craig James said the rebalancing of the Australian economy away from mining investment would soon cause a shake-up in the rankings.
“Western Australia continues to lead the rankings of best performing economies but in the latest quarter there was little to separate it from the Northern Territory economy,” he said.
“The mining construction boom is over, replaced by the home construction boom.
“As a result, winners and losers will change across Australia, not just industries but also state and territory economies.”
NSW lifted from fifth to third place following improvements in its economic growth, business investment, population growth and dwelling starts.
NSW is now the strongest state for new housing construction, with starts over 39 per cent above decade averages, Mr James said.
“The outlook for housing construction continues to strengthen, underpinned by low interest rates and strong demand by investors,” Mr James said.
The jobs market was strongest in the Northern Territory and ACT and weakest in South Australia, where the jobless rate is up almost 28 per cent on the decade average, Mr James said.
He said the outlook for the Tasmanian and South Australian economies remained challenging.
“The hope is that property investors will soon switch attention away from NSW and Victoria to more affordable housing sectors,” he said.