Despite the controversy embroiling Western Australia due to its shark cull policy, the state has emerged as Australia's top performing economy, followed by Northern Territory. Western Australia is leading the country's economy because of its strong growth in construction.
According to CommSec's quarterly State of the States report, South Australia and Tasmania had the lowest-performing economies. Following Western Australia and Northern Territory, NSW came in third place, followed by Queensland and Victoria in fourth and second places, respectively.
CommSec determines the strongest economies using eight key indicators such as economic growth, equipment investment, unemployment, population growth, housing finance and construction work. Craig James, CommSec chief economist, said the Australian economy's rebalancing away from mining investments may soon cause a change in the rankings.
Mr James said Western Australia leads other states, but based on last quarter's data, the figures were close to the economic stats posted by the Northern Territory economy. The mining construction boom is over and replaced by growth in home construction.
The winning and losing economies will change across Australia. Mr James said it is not only about the industries but changes are to be expected in state and territory economies. NSW moved up the economic rankings from fifth to third place after it showed improvements in business investments, economic growth, population growth and dwelling commencements.
When it comes to new housing construction, NSW is the state to beat with an increase of more than 39 per cent on ten-year averages. Mr James said the outlook for housing construction is positive as it continues to strengthen. The housing construction sector continues to enjoy strong demand from investors because of low interest rates.
Employment opportunities are increasing in the Northern Territory and ACT. South Australia has the weakest jobs market with an unemployment rate of nearly 28 per cent in an average of 10 years.
The economic outlook for Tasmania and South Australia continues to be challenging. Mr James said property investors may look for more affordable housing beyond NSW and Victoria.