Victoria remains in top spot on the economic performance rankings ahead of NSW.  Each of the states and territory economies were assessed on eight key indicators: economic growth; retail spending; equipment investment; unemployment, construction work done; population growth; housing finance and dwelling commencements. 

Victoria is in top spot due to strong construction activity and the lowest jobless rate in a decade. NSW is in second spot on the economic performance rankings and has held its relative position on most indicators. The ACT retains third spot on the performance but Tasmania is closing the gap, improving its relative position on four of the eight indicators. South Australia is now in fifth spot ahead of Queensland, with the former picking up its relative position on business investment. The Northern Territory remains in seventh position just ahead of Western Australia. 

Victoria ranks first on economic growth, unemployment and construction work done, while NSW still holds top spot for retail spending and dwelling starts. NSW is second ranked on three other indicators. The ACT has held on to third spot in the rankings. The ACT is top-ranked on relative housing finance and second- ranked on population growth and business investment. Tasmania is in fourth position on the economic performance rankings, but is closing the gap on the ACT. Tasmania is ranked first on the relative position on population growth and business investment and is in second spot on housing finance. While South Australia is now in fifth position on the performance rankings ahead of Queensland, there is still little to separate the two economies. South Australia is third on construction work done and fourth on two other indicators. Queensland is now in sixth position. Queensland ranks fifth on four of the eight indicators. The Northern Territory retains its seventh position on the economic performance rankings and can be broadly grouped with Western Australia. Both are facing challenges with the transition of resource projects moving from the production to the export phase. 

The Northern Territory is third-ranked on economic growth. But it lags all other states and territories on five of the indicators. The good news is that employment has now been growing for the past five months. Western Australia is seventh or eighth on all indicators (eighth on three indicators). But equipment spending is now the highest in 31⁄2 years. 

Here are the key findings of the report:

1. Victoria has maintained top spot on relative economic growth. Economic activity in Victoria in the June quarter was 26.7% above its ‘normal’ or decade-average level of output, ahead of NSW, with output 25.7% above the ‘normal’ level of output. 

2. In terms of retail spending, NSW has maintained the top spot, extending its lead over Victoria. 

3. In the June quarter, Tasmania, the ACT, NSW and Victoria had equipment spending above decade-average levels, the same result in the March quarter. 

4. In NSW, the trend unemployment rate equals the rate existing from January to April 2008, which is the lowest rate in monthly data back to 1978.

5. Victoria has retained the top spot with construction work done almost 39% above its decade average.

6. Tasmania is strongest on the relative population measure, with its 1.02% annual population growth rate almost 78% above the decade-average rate.

7. NSW has taken back the top spot for dwelling starts from Victoria.

8. Wage growth in the year to June was strongest in both Victoria and Tasmania (2.5%).

The State of the States assesses economic performance by looking at the most recent result – such as retail trade or construction – and compares that with the ‘normal’ experience. And by ‘normal experience’, we define this as the decade average. A resident of the state or territory can therefore assess whether they are experiencing relatively better economic times. Comparing states or territories on the same criteria determines which state or territory is performing the best on a certain indicator. 

But as well as relative economic performance, some are also interested in economic momentum. That is, annual economic growth. A state/territory may have been under-performing, but if annual growth is rising, then this suggests that performance has scope to improve. 

On the eight indicators assessed, Tasmania tops growth on four measures, ahead of Victoria (top on two measures). South Australia and NSW lead the way on one measure each. 

When looking across growth rates for the states and territories, Victoria exceeded the national-average on all of the eight indicators from Tasmania (five) and NSW and ACT (four). 

At the other end of the scale, Northern Territory under-performed the national result on all indicators. Western Australia out-performed the national growth rate on one indicator. 

If new vehicle registrations are added to the list of indicators, then there would be no change to the economic performance rankings. Victoria is the strongest on new vehicle sales, up 17.1% on decade averages. And annual growth of sales is also the strongest in Victoria (up 3.5%). 

Last quarter Victoria topped the economic performance rankings for the first time in the 9-year history of the surveys. And in the latest quarter Victoria remains just ahead of NSW. Both states have broad-based economic strength, underpinned by population growth, construction and investment activity. 

There is little to separate Victoria from NSW. It is possible the two states could exchange rankings over the next year. Strong job markets provide support for local economies although it is expected that home building will soften in the period ahead. 

NSW picked up one spot on dwelling starts but dropped one place on unemployment. Victoria lifted three spots on unemployment but eased one spot on both housing finance and dwelling starts. 

The ACT remains in third spot with changes in positions on five indicators but little change overall. 

Tasmania is still in fourth position but closing in on the ACT. Tasmania has improved its relative performance on four indicators. 

South Australia lifts from sixth to fifth position. Queensland has dropped in its relative position on four indicators. South Australia shifted its relative position on a number of indicators but especially lifted on business investment. 

The Northern Territory remains in seventh spot with Western Australia in eighth position. There has been slippage for both economies in terms of the relative positions with other economies. 

Encouragingly unemployment remains low in Northern Territory and there has been a drop in trend unemployment in Western Australia and a lift in dwelling approvals.