Commonwealth Bank: New data reveals Tasmania has the best-performing economy

A new economic report by the country’s largest bank has revealed which state economies are the best performing.

Tasmania has topped the states for economic performance, as traditional heavyweights lag due to lower investment and a reduction in spending.
The latest CommSec State of the States economic report has revealed for the fourth quarter in a row the island state has powered ahead due to greater population growth, retail consumption and investment in infrastructure and equipment.

The economic arm of the Commonwealth Bank noted there had been a “compression” in the rankings, with Queensland, South Australia and Western Australia the big improvers according to the survey.

Tasmania is the best performing economy according to CBA. Picture: Devils At Cradle

“Tasmania has now been on top for four straight surveys — either shared with another economy or in its own right,” CommSec chief economist Craig James said.

“Over the quarter Tasmania lost three places on housing finance but improved one place on construction work done and relative unemployment.”

In terms of relative economic growth, Victoria over the September quarter sustained the highest rise and is 23 per cent above its decade average of output.

The southern state’s rise is despite the extended Melbourne lockdown invoked by the state government in an attempt to control and suppress COVID-19 cases that were climbing in the second half of 2020.

NSW reported its worst performance in eight years and ranked equal with Western Australia in sixth place.

It is NSW’s worst performance in eight years. Picture: NCA NewsWire/Flavio Brancaleone

Housing finance in NSW was strong, showing the number of new home loans in the state are on the rise; however, unemployment levels over the quarter were 21.7 per cent higher than the decade average.

The Australian Capital Territory came in second overall and was largely driven by a strong improvement in the region’s jobs market.

Relative population growth was a major factor in Tasmania’s status of number one, with the state experiencing a 1.12 per cent hike in annual population growth. According to CommSec, it is 86.4 per cent higher than the state’s decade average.

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

Victoria experienced its worst population growth in nine years, while NSW had its slightest growth rate in almost 14 years.

Originally published as Commonwealth Bank: New data reveals Tasmania has the best-performing economy