So what is the ANZ Stateometer telling us? Firstly, of course, there are a number of different drivers around the country leading to some quite different conditions. Economic activity in NSW and Victoria is growing faster than long-run average rates.
The upturn in activity in NSW and Victoria (which together account for more than half of Australia's GDP) has been important in rebalancing activity as resources investment has turned down. Given their strong inter-linkages with the rest of the country, NSW and Victoria's performances bode well for an ongoing, albeit slow recovery.
The ANZ Stateometer also revealed Queensland's positive signs early in the year. While this has stalled over the June quarter, we think the overall direction is up. Tasmania is at risk of losing steam, with economic activity in the state having fluctuated around its trend rate recently.
Economic activity in the heavily resource-dependent states of WA and the NT appear to have stabilised for now. SA has fallen further behind. We expect further weakness for these three is on the horizon. The ACT is playing catch-up with strong momentum over the second quarter but this was from a low base.
FIGURE 2. MOST STATES AND TERRITORIES ARE BELOW THEIR LONG RUN AVERAGE