Australia’s top state economy leads for eighth quarter in a row

By Jon Bragg

January 25 2022
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The best-performing economy ranked first in retail spending, relative unemployment and other measures.

Tasmania has been named the best-performing economy in the country for the eighth quarter in a row as part of CommSec’s State of the States report.

The state led the rest of the country in four out of eight economic indicators, including retail spending, relative unemployment, equipment investment and dwelling starts, and ranked second on construction work done and relative economic growth.

South Australia took the second position overall, ranking second on the measures of equipment investment and relative unemployment, while Victoria took third, ranking first on construction work done and second on housing finance and dwelling starts.

“Australia’s state and territory economies are in solid shape, well supported by strong fiscal and monetary stimulus,” said CommSec chief economist Craig James.

“Unemployment rates are historically-low across much of the nation. Labour is in short supply across many industries – a reflection of current COVID-related self-isolation requirements and border restrictions.”

Western Australia took fourth place, ranking first on relative economic growth and second on relative population growth, and was followed in the rankings by Queensland, NSW, the ACT and the Northern Territory.

Outside of Tasmania’s lead, Mr James said there was little separating the performance of the other state and territory economies.

“Lockdowns have weighed on the economic performances of NSW and the ACT in the last survey,” he said.

“While both of these economies could scale the rankings again, new challenges are presented by COVID-19 restrictions and the resulting labour shortages – not just for NSW and the ACT, but for all economies. Meanwhile, the opening of domestic and international borders is also likely to further support the Queensland economy.”

Commenting on the findings of the report, Tasmanian Premier Peter Gutwein said that it represented “fantastic news” for the state.

“There is no doubt our economy entered the pandemic in a position of strength, and we worked hard to maintain this throughout the pandemic,” he said.

“We will continue to support Tasmanians, our businesses and our community to maintain this momentum as we continue through this transition phase and learn to live with COVID.”

While Tasmania will likely remain on top of the rankings in the short-term, according to Mr James, he noted that change might be in store over the rest of the year, particularly with Western Australia and South Australia rising up the rankings.

“Ahead, the country will continue to face challenges managing the latest Omicron wave with infrastructure spending continuing to be a key driver of growth in 2022,” Mr James said.

“In differing ways, each state or territory will attempt to ‘live with COVID’ throughout 2022, potentially leading to major changes in the performance rankings.”

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