Western Australian has once again been named as the country’s leading state when it comes to economic activity, and is likely to stay there for a while, according to the latest CommSec State of the States report.
The report has pinned the country’s two leading mining economies, Western Australia and the Northern Territory, ahead of the rest of the states and territories by a wide margin.
While the rest of the states have their own strengths and weaknesses, CommSec chief economist Craig James told SmartCompany it isn’t likely any will catch up to the resources-rich states within at least a year.
“The gap is very large between WA and the main states,” he says. “The Northern Territory has the greatest potential, when you look at how close the two are together and how they share the spoils.”
“It could be this year is when NT takes the top spot, but it’s unlikely any other state or territory would in the next year.”
The quarterly State of the States report measures each state on eight separate economic factors, and averages out performance among each.
And while WA and the NT are performing well, the report specifies both Tasmania and South Australia are underperforming, with both states suffering multiple economic weaknesses.
“Tasmania lags all other economies on seven of the eight indicators and is second weakest on the other indicator. A joint effort is required from the federal and state governments to lift the performance of the economy,” the report stated.
In the report, James said the states and territories are splitting into three groups – the mining economies, the underperforming economies, and the middle economies.
For those at the bottom of the rung – Tasmania and South Australia – James said government intervention will “probably be necessary”.
Without concerted action to boost economic activity, the risk is that a widening gap emerges between the strongest and weakest regions, entrenching problems over the medium and longer term.
Western Australia led the country in terms of retail trade, population growth and equipment investment as the resources boom continues, with the state also coming in second on economic growth, construction work and housing finance. It ranked third in unemployment and fifth in dwelling starts.
The Northern Territory topped four categories: economic growth, unemployment, dwelling starts and construction work. However, it has begun to lag in population growth.
Towards the east coast, the ACT was ranked as the third best performing economy, with strengths in dwelling starts. However, CommSec noted the gap between the ACT and New South Wales, Victoria and Queensland are smaller than the gap between the WA and NT.
“NSW is second strongest on unemployment, and third strongest on population growth,” it said.
“Victoria is strongest on housing finance and dwelling starts. And Queensland has high rankings on equipment investment, construction work done and retail spending.”
Across all states, real wages were positive. The ACT recorded the strongest growth at 2.6 percentage points, followed by Tasmania at 2.3 and Western Australia at 2.2.
Home prices increased in all states except in Hobart, down by 1.2%. The strongest growth was in Darwin, up by 7.3% and in Perth, up by 5.8%.