For the last couple of years, each July I have been looking at the CommSec State of the States economic report. As I mentioned then, Australia is one big country, but economically it could be regarded as eight different countries.
We prefer to call them states and territories.
Each of our six states and two territories has their own governments, separate from the Government of the Commonwealth of Australia. Each of these governments will make their own decisions on certain matters which in turn affects their states’ economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance and dwelling commencements.
It is those eight key indicators that Commsec looks at in these reports. They do them quarterly, I like to look at them just once at the beginning of each new financial year.
State of the States July 2016
It’s certainly worth remembering that what Commsec look at mostly are the trends; they look at current performances and compare them with decade averages for each of the states and territories.
With that in mind, let’s take a look at the current positions of each of our states and territories along with their strengths and weaknesses, with last year’s position in brackets:
1. New South Wales (1) – strong on population growth, weak on construction work
2. Victoria (2) – strong on housing finance, its weakness is the unemployment
3. ACT (6) – again, strong on housing finance, their weakness though is construction work
4. Northern Territory (3) – strong on construction work but weak in population growth
5. South Australia (7) – strong on equipment investment but weak on retail trade
6. Queensland (5) – strong on dwelling starts but weak on construction work
7. Western Australia (4) – is strong on retail trade but its weakness is the unemployment
8. Tasmania (8) – its strength is in the improved unemployment figures, but their weakness is economic growth
As you can see, New South Wales and Victoria have consolidated their positions in first and second place, Northern Territory and Queensland have both slipped down one position, ACT is up 3 places and Western Australia down 3. Tasmania remains unchanged in eighth position and South Australia has gone up a couple of places.
What does it all mean?
In terms of strength of economy, there is no doubt New South Wales and Victoria are the clear winners. If you look at the full report and watch the video, you will discover that New South Wales came top in five out of eight of the key indicators and Victoria came second in six out of the eight.
It is also worth remembering that these statistics are based on trends over the last 10 years. Since I’ve been looking at these reports, Western Australia has gone from first position, down to down to 4th and now seventh. Their weakness at the moment is the unemployment figures, but the actual rate of unemployment in Western Australia as at May 2016 is 5.7%.
Victoria, at 5.8%, Queensland (6.4%), Tasmania (6.5%) and South Australia at 6.9% all have higher unemployment figures than Western Australia. So whilst the trend is bad, due to the downfall of the mining sector there, the actual unemployment rate in WA at the moment is just average for Australia.
For the sake of completeness, the unemployment rates elsewhere are 3.8% in the ACT, 4.1% in Northern Territory and 5.2% in NSW.
Sometimes it’s easy to look at reports like this and get despondent, but I think there are also a lot of positives to take out of it.
Here are some quotes taken from the full PDF report:
- “NSW retains the mantle of the strongest in the nation for new home construction, with starts almost 77 per cent above decade averages.”
- “Victoria now has the fastest annual economic growth rate in the nation, up by 3.6 per cent on a year ago….”
- “The ACT is top-ranked on housing finance and third-ranked on economic growth, unemployment and population growth.”
- “Strongest real wage growth was recorded in the Northern Territory with wages 2.4 percentage points (pp) higher than consumer prices. Wage growth was certainly not the highest in the nation, however inflation was the lowest.”
- “The South Australian job market has improved in the past year and in particular the past quarter. If the positive trend continues, then there is scope for an improvement in retail spending.”
- “The Tasmanian economy is seeing a modest lift in momentum. The lower currency on three months ago is providing a boost to an array of sectors, especially tourism.”
- “Unemployment rates across all the states and territories except for Queensland eased in trend terms in the past three months.”
- “In six of the states and territories, construction work was higher than decade averages.”
- “In the March quarter, wage growth in all states and territories was above that of consumer prices.”
There you go, I think there’s something for everybody in these quotes for all states and territories. More for some than others, but then that will always be the case.
The full report
I’ve hardly scratched the surface of this report though, you’ll find much more information on the Commsec website. I think anybody deciding to move to Australia right now, especially if you have not yet decided where you want to go, should really take the time to read the full report.
You can watch a video summary and download a copy of that report from:
To compare to previous years, visit:
- Commsec’s Australian State of States Report July 2015
- State of the States: a CommSec Report July 2014
Remember, you can also grab these reports on a quarterly basis from Commsec, although I fully intend to do another roundup in July 2017.