NSW's economy is still Australia's powerhouse, report shows

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NSW Urban development
A building (C) owned by Morgan Stanley's Australian real estate unit Investa Property Group can be seen in central Sydney, Australia, July 28, 2015. Reuters/David Gray

New South Wales is still the number one performing economy in Australia. The state retains the rank it has held for each of the past 14 quarters, a new report shows.

NSW has been the best-performing state for just over three years, according to Commsec. It secured the top ranking across five of the eight indicators based on latest data.

The new State of the States report by Commsec shows the performance of Australia’s states and territories in the new quarterly report. It has looked into each state and territory’s retail spending, unemployment, population growth, construction work, business investment, housing finance and dwelling and economic growth.

NSW still has the top spot in five of the eight indicators: retail trade, dwelling starts, equipment investment, construction work and unemployment. NSW has recorded a jobless rate at 4.7 percent last quarter compared to the long-run average.

Next on the list of states with the best performing economy is Victoria. “Victoria has again come in as the second-best performing state after it was once more supported by the fastest annual population growth, followed by the ACT with its annual employment growth at its strongest in over a decade,” the report states, according to Business Insider Australia.

New South Wales, Victoria and the ACT have all seen the strongest levels of population increase. Data released by the ABS shows that NSW’s population lifted by 1.6 percent, 2.3 percent in Victoria, and 1.7 percent in the ACT in the 12 months to June 2017.

Other parts of Australia experienced population growth significantly lower compared to the levels seen in Australia’s southeastern states and territories. South Australia, the Northern Territory, Western Australia and Queensland were in the bottom half of the rankings. They have seen lower population growth compared to that of the southeastern corner over the same period. Population growth of 0.8 percent or lower was recorded in those states and territories except Queensland, which includes a trivial 0.1 percent increase in the Northern Territory.

The influence of population growth and the use of decade averages to score economic performance explain the result, marking down states and territories that have benefited from the mining booms. In comparison, weaker states and territories during the twin mining booms are now marked higher. This is said to be due to recent economic strength linked in part to population growth as well as stronger housing market conditions.