CommSec State of States report – October 2021
Each quarter CommSec attempts to find out how the Australian states and territories are performing by analysing eight key indicators:
- Economic growth
- Retail spending
- Equipment investment
- Unemployment
- Construction work done.
- Population growth
- Housing finance
- Dwelling commencements.
Just as the Reserve Bank uses long-term averages to determine the level of “normal” interest rates; CommSec have done the same with the economic indicators. For each state and territory, latest readings for the key indicators were compared with decade averages – that is, against the “normal” performance.
Now in its 13th year, the ‘State of the States’ report also includes a section comparing annual growth rates for the eight key indicators across the states and territories as well as Australia as a whole. This enables another point of comparison – in terms of economic momentum.
It is important to note at the outset that all states and territories are performing solidly, well supported by strong fiscal and monetary stimulus. That is no small matter in an environment dominated by the Covid-19 virus with the frequent – but necessary – lockdowns and border closures.
Unemployment rates are historically-low across much of the nation – remarkable when you consider the Covid-19 challenges and when the broader Australian economy was in recession just over a year ago. In a fast-evolving environment rankings of relative economic performance can change, even on a monthly basis.
In a relative sense, and for the seventh quarter in a row, Tasmania holds the mantle of the best performing economy. Tasmania leads on four of the eight indicators and is second ranked on another three.
There is little to separate the other economies. ACT is second; Western Australia and NSW are equal third; South Australia and Victoria are equal fifth; Queensland is seventh; and the Northern Territory is eighth.
Click here for a full copy of the CommSec State of State October 2021 Report.
Annual Growth Rates
The State of the States report assesses economic performance by looking at the most recent result – such as retail trade or construction – and compares that with the ‘normal’ experience. And by ‘normal experience’, we define this as the decade average.
A resident of the state or territory can therefore assess whether they are experiencing relatively better economic times. Comparing states or territories on the same criteria determines which state or territory is performing the best on a certain indicator.
In addition to relative economic performance, some are also interested in economic momentum. That is, annual changes in key indicators. A state/territory may have been underperforming, but if annual growth is rising, then this suggests that performance has scope to improve.
Please do not hesitate to contact us if you have any questions.
Kind regards,
The Coastline Private Wealth Team.
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