Article – NSW catching up to west and north in state economic race25 July 2014
21 July 2014
New research shows growth across Australia’s states and territories is levelling out as the economy moves away from its reliance on mining.
CommSec’s State of the States report for the March quarter ranks Western Australia as the country’s best performing state or territory, due to an improvement in home lending and construction.
Closely behind was the Northern Territory, helped by the gas boom, and New South Wales where home building and population growth were the driving forces.
New South Wales Treasurer Andrew Constance has claimed credit for the stronger economic growth in his state, which he argues is due to the Government’s support of the housing market.
“We have over the past three years had a very real focus on the housing sector and, as a result, the New South Wales economy is responding. It’s buoyant, the construction sector is buoyant,” he said.
“We have over $60 billion of investment in public infrastructure occurring throughout this year’s state budget, it’s no wonder that we’re now, in terms of the eastern states, the number one state.”
Queensland was in fourth place.
CommSec economist Savanth Sebastian says the gap between the leaders and laggards is closing.
“We used to always talk about a two speed economy, but really what you’re starting to see is a broader-based recovery in some of those non-resources states like NSW really starting to come to the fore, the mining states Western Australia and the Northern Territory to some degree pulling back a bit,” he said.
“So were going to see a more level playing field across the states.”
Victoria was in fifth position – growth there was capped by higher unemployment.
South Australia and the ACT were in equal sixth, and Tasmania remains in the bottom spot despite some signs of economic improvement in recent months.
Mr Sebastian says the positive effects of the rebalancing of growth will take time to be felt.
“It will take the next six to nine months to really filter through the economy,” he cautioned.
“The key issue we have is really a crisis of confidence. The economy lifted after the election last year, and it was doing quite well at least in terms of retail sales and housing momentum, but then the federal budget and all that uncertainty around the budget really saw a pull back.”
Courtesy of ABC News