Every quarter CommSec releases a report that looks into the economic performance of each of Australia’s states and territories. The report, State of the States analyses eight key indicators:
- Economic growth
- Retail spending
- Equipment investment
- Construction work done
- Population growth
- Housing finance
- Dwelling commencements
CommSec gathers the latest data for each state and territory, and compares it against the decade averages (also referred to as “normal” performance).
Out of the eight states, Western Australia is currently the weakest performer—but that’s probably not a surprise to you.
While Victoria has now replaced New South Whales as the top economic performer, things have scarcely changed for us, with WA holding the eighth spot on the ladder since October 2016.
Can it really be that bad?
In terms of economic performance, we are dead last. The March quarter saw economic activity in WA at just 7.6 per cent above its decade average. Now if that doesn’t seem so bad, Victoria is performing at 26.5 per cent above its “normal” level (oh).
If we look at unemployment, we have the weakest job market by far. The WA unemployment rate is 6.2 per cent, which is 24 per cent above the 5.0 per cent decade average (*googles flights to Melbourne*).
Construction work is 36.7 per cent below the decade average.
Retail spending has had a 7.4 per cent growth, which was more than the Northern Territory, but just behind Queensland (small wins people).
Housing finance—which is an indicator of housing construction and activity in both the real estate and financial sectors—is down 23.2 per cent, with construction of new privately owned houses down 20.3 per cent (but, we’re not last!).
Population growth in WA is actually up (oh, thank god), although only by 0.83 per cent—which is the fastest rate we’ve had in two years (okay, we are definitely doomed).
Equipment spending is the highest it’s been in over three years, and you would think that would be great news, but it’s still 12.6 per cent down from the decade average (*gives up*).
Western Australia has had annual growth rates below the national average on seven of eight indicators.
We have no jobs, no one is spending money, and everyone is leaving us.
Now I know what you’re thinking: is this decade average thing really fair considering WA had a once-in-100-years mining boom that fuelled money into the state, possibly pushing up the average and maybe making things seem worse than they are right now (You probably weren’t but I’ll run with it anyway)?
It’s possible. But either way, things aren’t fantastic.
During his brief visit to Curtin University, Craig James, Chief Economist of CommSec, commented on the state of the WA economy, and the potential for US-China trade tensions to impact Australia.
Despite the sad figures, he believes that there are still things to be excited about:
“Western Australia has a lot of opportunity in other sectors, especially in regards to agriculture and tourism. Equipment spending is up, businesses are spending money, and we are starting to see more investment go back into mining as a result of businesses seeing returns from prior investment.”
He also noted that Australia could potentially benefit from trade tensions between the US and China:
“Because we have globalisation and free-trade agreements in many parts of the world, if the US and China were to apply tariffs on one another they may decide to get their goods from elsewhere. So they could get goods from Brazil or wheat from Australia, and Australia may end up winning in that sort of environment.”
So, to wrap it up, we got pretty lucky with the mining boom, and now that it’s over, there is definitely a lot to be desired—but it hasn’t taken its last breath just yet. The mining sector is ramping up again, and there is a lot of potential opportunities for growth in other sectors such as agricultural-related resources and tourism.