Rather state final demand (household and business spending) was added to exports less imports. Western Australia continues to lead the way with economic activity in the September quarter 26% above the state’s decade average level of output. Next strongest was the ACT, up almost 23%, followed by the other resources-driven state, Queensland. While economic growth in Queensland has slowed over the past year with companies deciding to mothball new projects, actual activity levels are still well above levels considered ‘normal’ for the state over the past decade.
NSW was ranked eighth on economic growth with current economic activity just over 8 per cent above its decade average growth pace. Higher unemployment has led to weak retail spending, construction activity and business investment.
The measure used was real (inflation-adjusted) retail trade in trend terms with September quarter data the latest available. Monthly retail trade was also assessed (November data available) but broad results didn’t vary greatly.
Coming out on top was Northern Territory with spending in the September quarter just over 28% above decade average levels. Low unemployment, rising incomes and solid growth in home prices are key drivers of consumer spending. Queensland was next strongest followed by Tasmania,
At the bottom of the leader-board were NSW and the ACT, but in both economies, growth of retail trade has picked up markedly over the past year. For NSW both residential and engineering construction have been weak compared with past experience while ACT has been constrained by comparatively slow population growth.
The resources-dependent states of Western Australia and Queensland continue to lead the business investment leader-board. While growth in investment has slowed over the past year in both states, the amount of work underway is still markedly above decade-average levels.
In Western Australia, the amount of private capital expenditure in the September quarter was 107% above the average levels of the past decade. In Queensland business investment is 68% above ‘normal’ levels. Simply, there is a lot of work to be done.
ACT was in third spot in capex, with activity 51% above the long-term average, ahead of Victoria (up 40%). In both the ACT and Victoria, business investment was at record highs in trend terms in the September quarter.
Despite the global slowdown over 2008/09, capex in all states and territories is still above long-term averages except in Northern Territory. The Territory is affected by the lumpiness of new projects but also seems to have paid the price for the global slowdown with business investment 54% below the average levels experienced over the past decade.
The smaller states and territories are the major winners in the job stakes. Northern Territory leads the way from Tasmania and the ACT. In Northern Territory the trend rate of unemployment stands at just 3.5%, well below the 4.9% average level recorded over the past decade.
Demand for workers remains solid but population growth and interstate migration haven’t kept pace.
In Tasmania the trend unemployment rate of 5.4% is below the decade average of 6.8%. And in South Australia the unemployment rate stands at 5.5%, below the 5.9% average over the past decade.
Another of the territories, the ACT, is fourth on the unemployment leader-board; its 3.6% unemployment rate just below the 3.7% decade average.
At the bottom of the pack is NSW, its unemployment rate of 5.9% sitting almost 9% above the decade-average of 5.4%.
Encouragingly in the past month the trend rate of unemployment fell in Victoria, South Australia, Western Australia and the Northern Territory. The only increases in unemployment were experienced in Queensland and Tasmania.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
