ANZ report suggests Australia is out of economic doldrums

A recent report by the ANZ bank suggests that Australia could be out of the economic doldrums. Although the economy is looking better across the nation, the bank suggests it could not lead to stronger wage growth.

ANZ bank has looked into the performance of each state, and it found improvements. The “Stateometer” report, which considers how each state performs relative to other states and its past performances, suggests that the situation may not be as bad as it seems.

It has found that only the Northern Territory and ACT’s economies are growing below trend pace and are losing momentum. South Australia and Tasmania are heading above trend growth.

Victoria is still growing at an above trend pace. NSW, Queensland and WA economies are all accelerating, although their growth remains below average.

The latest findings reflect the picture of employment here. Growth in full-time employment is seen across all states this year.

Only in the Northern Territory and ACT is the annual growth of full-time employment below where it was this time in 2016. But full-time employment is rising in NSW, WA and SA this year compared to the previous year; faster compared to the 10 year average.

In Victoria, the growth of full-time employment has slowed compared to 12 months ago. But it is still well above the 10-year average.

The ANZ also notes that public infrastructure is booming even the backlog of private sector work remains low. It cites the Sydney Metro NorthWest, Sydney Light Rail, NorthConnex, and WestConnex projects, which are all reflected in record levels of public sector infrastructure spending. The bank states that business investment numbers must become less of a negative influence on economic growth going forward.

Population growth

Population growth is seen as a huge factor in Victoria’s performance. The state’s population has grown faster than the rest of Australia since 2011.

South Australia is seeing an improved labour market, some pick-up in the household sector, assurance from the commonwealth government’s naval ship building plan and the pick-up in renewable energy investment. However, it continues to lose people to other states, The Guardian notes.

As for Queensland, its “economy has largely moved past the construction downturn.” However, it continues to suffer the negative outcomes of falling coal prices and extreme weather events. Its property sector is “over-catered on the expectation that strong population growth would continue indefinitely, which it did not.”