Economic indicators NSW (October 2011)

Statistical indicators 6/11

• Talina Drabsch
• NSW Parliamentary Library

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14 November 2011The current volatility of the global economy has been discussed at length in recent times. Much has also been made of the structural shift currently taking place in the global economy as strength and dominance moves from the West to the East, with developing Asian economies growing at more than four times the rate of advanced economies (growth in China and India is forecast to be 9.5% and 7.8% respectively in 2011). Australia is thought to be well-placed as a result of its proximity to Asia and with an economy that is performing relatively well compared to some of its counterparts in Europe and the US.

Western Australia was deemed in CommSec's State of the State Report October 2011 to have the strongest performing economy within Australia, with the rest of the States and Territories divided into two groups. The second group which includes Victoria and South Australia is led by the ACT. Tasmania, New South Wales, Northern Territory and Queensland constitute the third group with little to separate them. Economic growth was lowest in NSW.

CommSec summarised the performance of the NSW economy as benefitting:   from above-average population growth, firmer growth in housing finance and abovenormal equipment investment. But dwelling starts are both below normal and below  year ago levels.  It assessed the strengths and weaknesses of the Australian States and  Territories, with population being the strong point for NSW where as ecconomic growth was its weakness.

The NSW Treasurer, the Hon Mike Baird MP, in his NSW Budget Statement 2011-2012, noted:

"Assuming that recent global financial market instability does not continue, conditions are expected to improve across the NSW economy over the next two years as the economy strengthens, led by a recovery in private sector spending. However, some sectors will continue to be constrained by a high Australian dollar, relatively high interest rates, fiscal consolidation and cautious household spending."

Regarding recent developments in the NSW economy, the Treasurer went on to state:

"Conditions in some NSW industries exposed to the high Australian dollar are subdued, particularly in tourism and manufacturing. The NSW retail sector is also soft reflecting increased household caution as evidenced by the rising saving ratio and recently declining consumer confidence. There is a significant divergence between sectors, though, with strong conditions currently in the NSW mining, farm, business services and household services sectors."

NSW’s terms of trade are expected to remain at a high level over the next two years as a result of elevated export prices and subdued import prices. NSW is also expected to have had a record level of crop production in 2010-11 (up 95% from 2009-10).

This October 2011 edition of Economics Indicators: NSW updates statistical information on key economic indicators, thereby presenting an updated snapshot of the NSW economy and providing relevant points of comparison with other Australian States and Territories. Statistics are updated to the end of the most recent quarter available. Most indicators have thus been updated to include the June or September 2011 quarters. The sections on Gross State Product, agricultural production and business investment have not been updated since the January 2011 edition as more recent data is not available.