CommSec: SA business investment on the rise but sluggish population growth weighing on local economy

Business investment in new plant and equipment is rising faster in South Australia than anywhere else in the country, according to a CommSec report, but sluggish population growth continues to weigh on the local economy.

South Australia’s economy is ranked fifth in CommSec’s latest State of the States report. Picture: Airborne Photography

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Business investment in new plant and equipment is rising faster in South Australia than anywhere else in the country, according to a CommSec report, but sluggish population growth continues to weigh on the local economy.

CommSec’s latest State of the States report ranks the state as the country’s fifth best performing economy, unchanged from the December quarter.

However referencing official ABS data, it confirms investment in plant, equipment and machinery rose by 24.1 per cent in the year to December, reaching a near seven-year high.

“South Australia remains in fifth position in the rankings, improving its relative position on the job market but losing two spots on construction work,” CommSec chief economist Craig James said.

“Equipment investment was up the most on a year ago in South Australia, up 24.1 per cent, from Queensland, up 11.3 per cent.

“Equipment investment in South Australia is near seven-year highs.”

For a second consecutive quarter Victoria and New South Wales shared the title of best performing economy.

Tasmania and the ACT are joint third while Queensland is sixth, but narrowing the gap to South Australia.

On other measures of economic performance South Australia is ranked fourth on the job market and housing finance, fifth for retail spending and construction work, and sixth on economic growth.

Population growth remains the achilles heel for the state’s economy, rising 0.8 per cent in the year to September - 12 per cent below the ten-year average and the slowest growth rate outside of Northern Territory.

“Population growth is clearly an important driver of the broader economy, especially retail spending and housing demand,” Mr James said.