After rising sharply over the second half of 2015, New South Wales and Victoria are expected to move closer to trend growth over 2016. It is important Queensland takes up some of this slack as it continues to transition away from the mining investment boom, although recent developments in the Stateometer flag risks to this outlook.
Tasmania continues to grow steadily as it did through much of 2015 but early indications are momentum has eased. Queensland has experienced some deceleration in activity. ANZ research will be keeping a close eye on the state in the future.
The Western Australia and the Northern Territory economies remain in contraction while South Australia and the Australian Capital Territory continue to show signs of recovery.
The ANZ Stateometer is an indicator that synthesises a large volume of monthly data to give our clients a one-stop-shop for current state and territory economic conditions.
ANZ Research has included 16 economic indicators that cover labour market conditions, household and business activity and prices and analysed them using a statistical technique called principal component analysis. PCA shows common trends in the data, and in this case, the underlying pulse of domestic economic activity for each state and territory.
Kirk Zammit is an economist at ANZ and Felicity Emmett is Head of Australian Economics at ANZ.