Western Australia’s economy is leading the nation as the state tops CommSec’s State of the States report for the first time in a decade.
Western Australians have been shopping as more people move west where jobs are plentiful, cementing the state’s economy as Australia’s best for the first time in a decade.
Since July 2014, Australia’s westernmost state has not topped CommSec’s State of the States report, which measures economic performance and momentum based on eight indicators.
In the October quarterly report released on Monday, resource-rich WA ranks first for retail spending, relative unemployment and population growth.
Jobs are plentiful in Western Australia. Above, the Perth skyline
This was because the country’s economies were supported by a resilient labor market and strong population growth, even as consumers face high inflation and borrowing costs, said CommSec Chief Economist Ryan Felsman.
“What we’ve seen in Western Australia is broad-based growth in the private sector, and that’s being supported by the resources sector,” he said.
Mining dynamism and strong population growth were supporting the state’s housing and labor markets, Felsman said.
WA’s population has surpassed three million people for the first time, and the state’s rapid growth has added one million people in the last 20 years.
South Australia was dethroned after topping the list for three consecutive reports. It continued to be the country with the best performance in real economic growth and housing construction.
The report, which judges performance against each jurisdiction’s historical benchmark, places Queensland in third place. It jumped two places due to the increase in mortgage lending, which represents a 39 percent increase in the long-term average.
Higher interest rates were really hurting southeastern states and territories, Felsman said.
Victoria dropped one place to fourth place, despite leading construction work carried out amid its Big Build projects. Tasmania rose to fifth place and the ACT fell to sixth.
Despite being the state’s largest economy, New South Wales continues to languish in seventh place as the “rate-sensitive” state grapples with its expensive and slowing housing market.
New South Wales was the last state ranked in the “state of the state reports”. The Northern Territory was the last of the states and territories.
“There is a slowdown in house price growth and households are more indebted in places like Sydney and that is weighing on retail spending, along with business investment and housing construction,” Mr Felsman said.
The Northern Territory is once again in last place.
In terms of annual growth, which is used to compare economic momentum, WA, Queensland and the NT lead the rest of the pack.
“Those states are focused on the resources sector, and although demand from China has weakened, there is hope for stimulus there,” Felsman said.
“We have seen broad easing of monetary policy around the world, including in China, which also provides some support to prices of industrial metals, such as copper, nickel and zinc.”
Expectations that the Reserve Bank would cut interest rates at least in the first half of 2025 would significantly change the fortunes of some states and territories, particularly those lagging behind at the moment, Felsman said.