CommSec’s quarterly State of the States report has revealed Queensland nabbed top spot from Tasmania following improved population growth, a solid job market, and buoyant overseas demand for energy resources.
CommSec's methodology measures eight economic indicators including economic growth, retail spending, unemployment, and housing finance compared with a region's decade average.
Queensland had the strongest relative population growth, with a 2% annual growth rate, 30% higher than the decade average.
The Federal Government’s latest Population Statement noted the Sunshine State is forecast to be the fastest growing state until at least 2023-24.
Queensland has benefitted from an inflow of migrants since the pandemic—especially people moving from NSW and Victoria.
As a result, home loans and retail spending have been boosted together with economic activity more generally.
While Tasmania relinquished its crown from last quarter and now sits in second position, there is little to separate the top two economies.
Tasmania ranked first on equipment investment, up 76.8% on the decade average.
CommSec Chief Economist Craig James said Queensland’s diversified economy had traditionally prevented it from taking out the top ranking.
“Queensland has a strong report card, ranking first on relative population growth and relative unemployment, and is second ranked on three of the other eight economic indicators,” Mr James said.
“When looking at annual growth rates to get a guide on economic momentum, Queensland had annual rates that exceeded the national average on five of the eight indicators.
“In terms of future economic performance for all state and territory economies, much will depend on the performance of housing and job markets at a time of higher interest rates.”
Source: CommSec State of the States - January 2023
With Covid-19 now in the past, Mr James believes the housing and job market sectors will determine how economies perform over 2023.
“A solid job market will provide valuable support for the key indicators of housing purchase and retail trade,” he said.
“Also the re-opening of China will be important for resources and tourism-focused states.”
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