Victoria ranks as Australia's best performing economy

Victoria has emerged as the top-performing economy in the country for the first time in over a year, according to CBA’s latest CommSec State of the States report.

Victoria’s ascent to the top spot from fifth place in the previous survey (July) can be attributed to robust economic activity, strong retail spending, increased business investment, and its highest population growth in nearly seven years.

The top six economies are closely aligned in their economic performance, with South Australia now ranked second, followed by NSW, Queensland, Western Australia, Tasmania, and the ACT.

The CommSec State of the States report, a quarterly assessment of economic performance, evaluates each state and territory by comparing key indicators such as economic growth, retail spending, equipment investment, unemployment, construction, population growth, housing finance, and dwelling commencements.

The report also places additional focus on annual growth rates for the eight indicators to underscore economic momentum, indicating the potential for Australia's economies to climb in the economic performance rankings in upcoming surveys.

Craig James (pictured above), CommSec chief economist, said Victoria saw improvements in its ranking on four of the eight indicators.

“Economic activity in Victoria in the June quarter was 7.7% above its four-year average level of output and equipment investment was at record highs as well – up 19.7% on the decade average,” James said in a media release.

“While the lift from fifth to first is surprising, we knew coming into this quarter there was little to separate the economic performance of the states and territories. We expect Victoria to face challenges from the other economies in the period ahead.”

He said the report also highlighted strong economic momentum from Western Australia, leading in annual growth rates among the other states and territories.

State and territory highlights:

• Victoria has secured the top position in terms of relative economic growth and construction work
• South Australia has taken first place in relative unemployment rates
• Queensland ranked highest in home loans
• Western Australia claims the top spot for relative population growth
• Tasmania leads in equipment spending and dwelling commencements
• The ACT has topped the list for retail spending
• New South Wales performed strongly, ranking second or third in four of the eight indicators
• The Northern Territory secured fourth place in relative population growth

Annual growth rates

• Examining annual changes in economic indicators provides a valuable gauge of economic momentum
• Western Australia currently holds the top spot for the most robust economic momentum, while New South Wales, Victoria, and Queensland are all in a shared second position
• South Australia has now moved up to fifth place, overtaking the ACT, which now stands in sixth place. Following them are the Northern Territory and Tasmania
• Western Australia outpaces other states and territories in terms of annual growth rates for three out of the eight indicators
• NSW, South Australia, the Northern Territory, Queensland, and the ACT each lead in one of these indicators

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