The New South Wales economy has overtaken Western Australia where the fading mining boom has seen it lose ground in terms of population growth, retail trade and investment.
The New South Wales economy has been in the headlines this quarter following the release of the October CommSec ‘State of the States’ report. New South Wales was ranked the best-performing State economy, with CommSec citing population growth and dwelling starts as key drivers of economic growth in the State. It has overtaken Western Australia where the fading mining boom has seen it lose ground in terms of population growth, retail trade and investment.
The relatively strong position of New South Wales was welcomed by Premier Mike Baird who described the housing sector as the the ‘cornerstone’ of the State’s growth.
While the CommSec report paints a positive picture for New South Wales, growth has not been consistent, nor sustained across all segments of the State economy. Among other areas of weakness, labour market indicators have softened. Unemployment is up 0.6 per cent since March, job vacancies have declined and employment growth has been stagnant for the past six months.
Additionally, New South Wales continues to have the highest trade deficit of all the States; and despite improving for the quarter, has been deteriorating for the last decade or so.
The bigger picture therefore suggests that while the NSW economy remains in a relatively strong headline position, other areas of the State economy need to be stimulated if growth is to be realised more broadly and sustained once the housing sector slows.