For the first time in more than a decade, WA has reclaimed the title of Australia’s best-performing economy — driven by a resilient jobs market, booming house prices and our insatiable appetite for shopping.
CommSec’s State of the States report, to be released Monday, will crown WA the national leader after it topped the rankings in three of eight key measures — retail spending, unemployment and population growth.
WA has come close in multiple quarterly assessments by Commonwealth Bank’s brokerage arm but has not held the coveted honour since July 2014.
The report said that for the fourth survey in a row, WA also had the strongest economic momentum and had been “consistently strong” across most measures.
“WA’s robust economic fundamentals, especially its low unemployment and strong population growth, has fuelled nation-leading consumer spending, pushing the State to the top of the leaderboard for the first time in a decade,” said CommSec chief economist Ryan Felsman.
“WA is well positioned for sustained future performance; however, the competition remains intense, particularly among the top three States with Queensland moving quickly up the rankings.”
Despite Perth recording the biggest annual increase in consumer prices — up 4.6 per cent in the 12 months to the end of June — shoppers pushed WA from third to first in retail spending, with real spending 10.5 per cent higher in the June quarter compared to its decade average.
It also came out tops in unemployment at just 3.7 per cent, well below the decade average, and population growth of 3.1 per cent, which has helped to fuel retail spending but also put further pressure on already tight housing supply.
On Sunday, Premier Roger Cook said WA was in a “great place”.
“We’re still the fastest-growing economy in the country. We’re the fastest-growing population in the country,” he said.
“Western Australia is on the cusp of a huge opportunity to enact change as a result of renewable energy and the energy transition, particularly through the development of our critical minerals.
“We have to lock in those gains. We have to take advantage of these opportunities.”
Chamber of Commerce and Industry WA chief economist Aaron Morey said while WA was the strongest economy in the country, it still faced its challenges — particular when it comes to the energy transition and the volatility in commodity markets for future-facing battery ingredients such as nickel and lithium.
“We’ve got to continue to put in the place the condition to ensure WA remains a competitive place to invest,” Mr Morey said.
“At the moment we have the highest payroll tax burden in the country. That’s not fair on local businesses and it’s something the Government should address.
Mr Morey said despite an uptick in dwelling completions there was no panacea to the longer-term housing supply crisis. But he said changes to stamp duty could encourage more homeowning couples occupying four-bedroom homes to downsize to ensure a more efficiently use current housing stock.
Mr Felsman said the strength of Australia’s State and Territory economies continued to be driven by a surprisingly robust job market and solid population growth, which was underpinning economy-wide demand.
But the Reserve Bank’s reluctance to deliver a short-term cut to the official cash rate was putting pressure on consumers and slowing economic momentum.
“The path forward will largely depend on the ongoing strength of the labour market, trajectory for monetary policy and China’s economic recovery,” Mr Felsman said.
CommSec’s report may have trumpeted WA’s strengths but it also highlighted points of weakness among the rankings, including real economic growth (where it placed seventh) and construction work (fifth).
It was ranked fifth for dwelling starts, but the report noted it was the strongest State in terms of annual change — up 24.3pc as the stimulus-fuelled heat came out of the construction market.
WA was second for equipment investment and housing finance, just behind fellow resource powerhouse Queensland.
Perth also recorded the fastest annual lift in house prices — up a staggering 24.1 per cent to the end of September compared to a national rise of just 6.7 per cent as Sydney and Melbourne came off the boil.
South Australia has topped the State of the States rankings for the past three quarters. It has now slipped to second but still claims top spot for economic growth.
Queensland made a significant leap from fifth to third spot. Victoria, once a podium contender, slipped to fourth place, and Tasmania climbed to fifth from sixth spot.
The ACT moved down to sixth from fourth place, followed by NSW, which retained its position in seventh spot. The Northern Territory rounded out the rankings in eighth.
https://thewest.com.au/business/economy/booming-wa-crowned-australias-best-economic-performer-in-latest-commsec-state-of-the-states-report-c-16536795