Construction sector boom and record low jobless rate make SA’s economy third-best in nation

Business is booming in South Australia with the state’s economy now the third-best performing in the nation. Here’s what’s driving it – but will it last?

A construction sector boom and record low jobless rate have surged South Australia’s economy to third-best performing in the nation, a new report shows.

The latest State of the States report, released on Monday by CommSec, shows the state’s overall ranking has moved up two spots and is behind only Queensland and Tasmania.

The quarterly report also ranks states by annual growth rates across key indicators including economic growth, retail spending, equipment investment and unemployment.

SA retained top spot on construction work done, which was 23.8 per cent above its decade average. It also climbed to first position for the number of dwellings started, which came in at 22.6 per cent above the decade average.

SA’s record low unemployment rate — which latest Australian Bureau of Statistics data showed to be 3.9 per cent seasonally adjusted — also contributed to the overall ranking.

There are now 923,400 people employed in South Australia, representing a rise of 15,200 since March last year.

“Relative economic growth”, listed as SA’s weakness, was 24.3 per cent above the decade average.

Acting Treasurer Kyam Maher said it was “extremely encouraging”. Picture: Roy VanDerVegt

That figure was the lowest in the nation, with Western Australia leading the states and territories at 36.6 per cent above its average output.

Acting Treasurer Kyam Maher said it was “extremely encouraging” to see the strength of South Australia’s economy recognised in the report.

“Construction creates jobs, and this is reflected in the data, with a booming construction industry and record jobs numbers,” he said.

“We will continue to invest in opportunities to support local businesses and grow our economy.

“There are tough times ahead, but SA is well-placed to weather any global headwinds.”

After SA in third spot, New South Wales and Victoria ranked equal fourth, the ACT came in at sixth, Western Australia in seventh and the Northern Territory ranked eighth.

CommSec chief economist Craig James said it would be interesting to note movement in the rankings this year “now that Covid-19 is not exerting the influence it played over 2020-2022”.

“The two focal points in coming months are housing and job markets. A solid job market will provide valuable support for the key indicators of housing purchase and retail trade,” he said.

“Also the reopening of China will be important for resources and tourism-focused states.”