South Australian Economic Performance Tops Nation

A solid job market and construction activity has put South Australia at the top of the economic performance leaderboard, according to a new report.

For the third quarter in a row, SA has topped the CommSec State of the States report, just ahead of Western Australia.

The State of the States report assesses the performance of state and territory economies compared to the averages of the past decade or “normal”.

For each economy, the latest level of the indicator—such as retail spending or economic growth—is compared with the decade average.

South Australia was the most consistent performer, taking out the top spot on three of the report’s eight key economic indicators—relative unemployment, construction work done, and home starts.

Western Australia remained in the second spot and was fast closing in on first place, the report said, leading on relative population growth and home lending.

Victoria remained in third place with the ACT in fourth position.

The previously equal fourth-placed states of Queensland (now fifth), Tasmania (now sixth) and NSW (now seventh) all dropped down the leaderboard. The Northern Territory remains in eighth spot.

CommSec senior economist Ryan Felsman said that across the country, the economic performance of Australia’s states and territories was being supported by employment and population growth at a time of higher-than-desired price inflation.

▲ CommSec senior economist Ryan Felsman and Adelaide’s Rundle Mall.

“South Australia’s continued high-ranking is being driven by a solid job market and construction activity,” Felsman said.

“While South Australia retains first place, Western Australia is seeing the strongest annual economic momentum, so it will be interesting to see how this plays out in the coming quarters.

“Generally speaking, state economies have slowed as consumers respond to higher borrowing costs and price pressures. The future economic path will be dependent on the resiliency of the job market and interest rates.”

While South Australia ranked first on three indicators, its economy has lost momentum in recent months due to weaker consumer and business spending, while the West has the strongest annual economic momentum and appears primed to challenge for top spot in the next survey. 

The report also analysed annual growth rates across the eight economic indicators, revealing that Western Australia and Queensland are now in joint first place on this measure of economic momentum, followed by the ACT and Victoria in third and fourth.