Alfred dampens Queensland’s State of the States performance but WA comes out on top again

Ex Tropical Cyclone Alfred dampened Queensland’s economic performance - but not in the way you might think.

Queensland was hurt by the impact of Cyclone Alfred on the coal sector.

The impact of ex Tropical Cyclone Alfred kept Queensland in third place on the leaderboard in the latest CommSec State of the States report.

In the March quarter Queensland ranked second on relative unemployment and housing finance but consumer activity in the southeast corner was disrupted following the ex cyclone which also impacted on economic growth by dampening coal and agricultural exports.

Chief CommSec economist Ryan Felsman said despite the impact of the ex-cyclone on the local economy Queensland remained resilient.

“The latest State of the States report shows that the Sunshine State’s solid performance was supported by a rebound in exports and relatively strong housing activity and employment,” he said.

Ex Tropical Cyc; lone Alfred hurt Queensland’s coal exports.

Commodities and tourism focused Western Australia led the nation’s economic performance rankings for a fourth consecutive quarter while South Australia jumped from fourth to second on the leaderboard.

Victoria fell from second to fourth, Tasmania was steady in fifth, NSW fell from fifth to sixth with the ACT and Northern Territory remained last in eighth place.

Mr Felsman said overall, the economic performance of Australia’s states and territories was supported by a combination of slowing inflation, falling interest rates, rising real wages, robust government spending and a solid labour market.

“But economic growth has moderated, held back by slowing public investment, population growth and household spending,” he said.

“The future path will depend on the resiliency of the job market, further interest rate cuts and US President Donald Trump’s trade policies.”

US President Donald Trump.

The quarterly report determines which Australian state or territory economy is performing best by tracking eight key economic indicators and comparing the latest observation with decade averages.

Mr Felsman said Western Australia led across several economic measures, taking first place in retail trade, housing finance, and business investment.

“Meanwhile, South Australia ranks first on two indicators – construction work and dwelling starts,” he said.

Queensland was ranked second on relative unemployment and housing finance and despite above-average net overseas migration, supporting household spending, Victoria was in third spot on four indicators and was held back by weakness in relative unemployment.

However, Victoria stayed in second spot for retail spending with it being 10 per cent above its decade average.

South Australia ranked first in construction work.

Tasmania ranked first on relative unemployment, with the trend jobless rate at a record low 3.8 per cent in June. But the state was held back by relative population growth, which is at the weakest level in nearly a decade and a weak in private sector investment impacted on economic growth.

NSW was helped by Sydney’s heavily mortgaged households benefiting from interest rate cuts but was hurt by the delayed transition from public to private sector led growth, while the ACT which ranked first on relative economic growth, was constrained by more modest public demand and weak business investment

The Northern Territory was strong in relative population growth but the decade-average method of assessing economic performance disadvantages the Top End given significant LNG construction over 2012–18 inflated a range of economic indicators.

That said, the Territory has lifted its economic performance in the past 12 months.

Originally published as Alfred dampens Queensland’s State of the States performance but WA comes out on top again