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Economic Outlook - Australia

The quarterly comparison of Australia’s states by Commsec shows the economic trends which will dominate 2015 There’s no such thing as a simple ‘Australian economy’. Understanding the differing property markets in Sydney and Hobart is more than a matter of geography, and that’s where CommSec’s ‘State of the States’ report comes in. The report measures states on performance across a number of categories, which is measured against that state’s own average over the past decade. Thus differences of population and historic wealth have less impact (but are still relevant – see below*). NSW remains at the top of the table, joined by the Northern Territories, which displaces WA. The second grouping is Victoria and Queensland. Then comes the ACT, South Australia, with Tasmania remaining in 8th place. Read on to see the state of your state in detail: Australian Capital Territory

What Commsec say: "The ACT is top-ranked on housing finance but is bottom ranked on unemployment. As a result the ACT economy lacks momentum." What the numbers say: unemployment in the ACT, at 4.9%, seems very low, but this is 41% higher than its decade average ‘normal’ of 3.5% New South Wales

What CommSec say: "NSW is on top because population has been growing in recent years and now home construction is responding to the shortage of accommodation. NSW looks to be well supported by home construction and infrastructure spending over 2015." What the numbers say: construction did not improve as much as you might think in December, at 14% above decade average, behind QLD, WA and the NT. However dwelling starts are the second strongest in the nation, at46.3% above decade average (behind the NT). Northern Territory

What CommSec say: "the Northern Territory has overtaken Western Australia to now share the mantle of best performing economy…Huge gas projects are driving the NT economy." What the numbers say: Whilst the NT has roared ahead of other states on decade averages for equipment investment, jobs, construction, dwelling starts and more, it lags 6th on housing finance and 7th on population growth. Queensland

What CommSec say: "in Queensland, overall construction work and equipment spending are supporting economic activity. But the soft job market and relative under-performance on population growth are constraining growth in home building." What the numbers say: Queensland is ranked 3rd on construction (24% above decade average) yet 6th on dwelling starts (still 18.7% above decade average) South Australia

What CommSec say: "In South Australia, annual population growth is higher than a year ago and unemployment is middle-ranked. But the state underperforms on retail spending and home building and buying." What the numbers say: South Australia has the second-lowest economic performance in Australia, dragged down by retail spending and construction which barely beat the decade average (up just 4.3% and 4% respectively) Tasmania

What CommSec say: "There are brighter signs in Tasmania with the trend jobless rate at 28-month lows. Further, population growth has lifted and overall construction is growing solidly." What the numbers say: Tasmania nevertheless remains at the bottom of CommSec’s overall list, with housing finance, equipment investment and dwelling starts significantly below their decade averages. Victoria

What CommSec say: "high population growth is supporting home building activity but it is lacking in momentum that could enable it to move up the economic performance ladder." What the numbers say: Although increases construction and housing starts lag behind those in NSW, it’s interesting to note that housing finance in VIC is 8.8% above the decade-average whilst NSW is up just 2.1%. Western Australia

What CommSec say: "there will always be a changing of the guard in terms of economic performance as relative economic growth drivers variably strengthen or fade. The end of the mining construction boom should lead to more balanced growth in Western Australia." What the numbers say: although slipping to 3rd place in the overall ranking, with rising unemployment (34% above the decade average) and slowing population growth of 2.16%, the highest in the nation yet 18.2% below the decade average. *Population and historic wealth differences

If we’re measuring states against themselves, than why do these still matter? Well, a small population can mean certain changes happen much more quickly. If a couple of major employers close in the ACT, it will have a much more profound and rapid effect on unemployment than if the same happened in Victoria. The same applies with new mining ventures in the NT. Of course these changes could also be the result of long-term trends.

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