Tasmania retains lead in CommSec State of the States report

1:01am Jul 24, 2023

Tasmania's economy is still leading the nation but NSW is gaining fast, according to a prominent quarterly economic report card.

The Apple Isle stayed atop the CommSec State of the States ladder in the second quarter on the back of strong performances in new home building and company investments in equipment.

But NSW "narrowed the gap" to its southern rival, buoyed by the nation's strongest job market and improving overall more quickly than any other state or territory.

Tasmania's economy is still leading the nation but NSW is gaining fast, according to a prominent quarterly economic report card. (Nine)

Tasmania was held back by the nation's weakest population growth and NSW by a roughly average ranking in dwelling starts.

CommSec chief economist Craig James said there was little to separate the two states

"NSW has solid momentum on its side, leading the ranking of annual growth rates for the eight indicators.

"In fact Tasmania faces challenges from at least three economies – NSW, as well as South Australia and Queensland."

CommSec found there was "little to separate" the top four states and also noted "encouraging signs" for Western Australia, in fifth.

"Western Australia leads other states and territories on annual growth rates for two of the eight indicators," James said.

"This points to potential to ride up the economic performance rankings over the next few years."

The Apple Isle stayed atop the CommSec State of the States ladder in the second quarter on the back of strong performances in new home building and company investments in equipment. (Interface Constructions)

In fact, there were bright spots for most regions, with Western Australia leading on economic growth, ACT for retail spending, Victoria for construction work, South Australia on relative population growth and Queensland in home loans.

The Northern Territory's performance was the exception, trailing in several indicators and finishing last overall. But CommSec noted its method of comparing performance to a decade-long "average", disadvantaged the Top End thanks to the liquid natural gas boom from 2012–18.

Looking ahead, CommSec will be keeping an eye on population, jobs and housing markets, as well as China's potential to influence resource- and tourism-focused states.

"But clearly, the success achieved in lowering the rate of inflation will determine the path of interest rates and economic activity across all states and territories," the report stressed.

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