NSW economy tops national league yet again

map of state of New South Wales and Australian flag

The NSW economy has come out on top of the State of the State report for the sixth consecutive quarter, topping the nation in six of the eight criteria

The gap is widening between economic powerhouse NSW and the rest of the nation, but the ACT is on the rise.

NSW, the country’s most populated state, took out the title for a sixth consecutive quarter, according to CommSec’s State of the States report.

The NSW economy edged a little further ahead of Victoria, although both states are maintaining a healthy lead over the rest of the country, CommSec chief economist Craig James said.

The big change over the past quarter has been the lift of the ACT, which bumped up to equal third position alongside the Northern Territory from sixth place.

‘A sharp lift in dwelling starts is a clear reason for the improvement,’ Mr James said, ‘and stronger housing activity will support the job market and retail spending over 2016.’

CommSec ranks the states and territories every three months on eight key measures.

NSW retained its top rankings on population growth, retail trade, dwelling starts and home loans but now adds unemployment and equipment investment to the list.

‘The state’s unemployment has improved while population growth is above long-term averages, thus providing solid momentum to the NSW economy,’ Mr James said.

Western Australia came in fifth, followed by Queensland, South Australia and then Tasmania.

Mr James said the Northern Territory is in for a rocky ride in the next few years as key resource projects are either finished or near completion.

Western Australia continues to slip, with slower population growth and higher unemployment likely to constrain housing market activity.

While Queensland remains in the third tier of economies, unemployment has fallen to two-year lows in trend terms.

The South Australian job market has also improved in the past eight months, which could boost retail spending if maintained.

And underperformer Tasmania continues to struggle, ranking seventh or eighth on four criteria, Mr James said.

‘While unemployment has lifted in the past two months, real wage growth remains healthy,’ he said.

How the states fared:

  1. NSW – strength in population growth, weakness in economic growth
  2. VIC – strength in population growth, weakness in equipment spending
  3. NT – strength in construction work, weakness in population growth
  4. ACT – strength in dwelling starts, weakness in construction work
  5. WA – strength in economic growth, weakness in job market
  6. QLD – strength in dwelling starts, weakness in construction work
  7. SA – strength in equipment investment, weakness in dwelling starts
  8. TAS – strength in job market, weakness in economic growth