Although labour markets maintained above-trend growth, they slipped from the eight year high recorded in the March quarter.
Trade was positive and with increased momentum across all geographies except Tasmania and the NT. Queensland and South Australia maintained a steady, above trend, trade sector in the June quarter.
Some downside risks have become more acute - trade tensions stemming from the US; leadership ructions in domestic politics, Australian households are - on average - more vulnerable to changes in housing market sentiment due to rising indebtedness; and some of our regional communities through the south, northern and eastern states are suffering from the drought, which worsened over the June quarter.
Despite all this, investment spending remains good; interest rates are low; profit growth is solid and the Australian dollar has depreciated further.
Public spending growth also remains solid. There are also upside risks from higher commodity prices, which could be more stimulatory for the economy than we currently expect.
The loss of momentum indicated by the ANZ Stateometer in the June quarter does not signal a change of economic direction for any of our states or territories. The NT though may experience further slowing as it adjusts from the very high levels of activity associated with the Ichthys LNG plant.
ANZ Research expects the unemployment rate to continue to move lower in all states and territories over the coming 12 months and inflation to gradually rise.