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Stateometer: on the right track

Growth in half of Australia’s states and territories moved from deceleration to acceleration in the three months to September, according to the latest ANZ Stateometer.

While momentum was positive across much of the country the pace of growth remained below trend. 

"NSW, Tasmania, Western Australia and the Northern Territory all shifted from the left to right of the Stateometer grid.” 

Surprisingly, consumers were not the driver of the shift, despite the combination of lower interest rates and tax cuts throughout June and July. Every region except for the Australian Capital Territory recorded below-trend consumer components – some even lower than the previous quarter.

The business component showed improved momentum in resource-rich Western Australia and Queensland, likely reflecting improved performance in the mining sector. The housing component improved somewhat in New South Wales, Victoria and WA while continuing to show strength in Queensland.

Overall, the Stateometer showed NSW, Tasmania, Western Australia and the Northern Territory all shifted from the left to right of the Stateometer grid in the September quarter. South Australia and the ACT were the only regions to record above-trend growth.

Capital

The Stateometer showed the ACT grew above trend and accelerated in the three months to September, while Queensland, WA, Tasmania, the NT and NSW all grew below trend - but accelerated.

NSW appears to have turned a corner, with positive results in housing and trade lifting momentum. There is considerable room for improvement, however, with the state’s economy still growing at a below trend rate as the consumer dragged.

South Australia grew at an above trend rate but decelerated. Victoria grew at a below trend rate and decelerated further.

Growth in Victoria remains below trend after relatively strong growth in 2018-19. Housing was a little less of a drag on the state’s economy in the quarter, as was trade. The labour component was still positive but less so than in the June quarter.

The ANZ Stateometer is a set of composite indices which measure economic performance across Australia’s states and territories.

The index for each jurisdiction extracts the common trend across multiple indicators (between 24 and 32 depending on data availability in the jurisdiction). using principal components analysis. The economic indicators are all monthly data series and cover business and household activity, the labour market, the housing market and trade.

Developments across this diverse country are rarely uniform and we hope these geographically specific indices help you to see through the haze of state by state data and more intuitively piece together the state of the national economy.

Cherelle Murphy is a Senior Economist at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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