10 Aug 2021
Economic growth remained strong across Australia’s states and territories in the three months to June the ANZ Stateometer Index found, ahead of the wave of lockdowns seen early in the third quarter.
This strong position and robust momentum is likely help mitigate the direct and indirect impacts of the economic shock to be seen in the next edition of the index.
“Broad-based strength was seen across the board in the labour market and consumption also accelerated.”
The pace of growth in all states and territories accelerated above trend in the second quarter of calendar 2021.
As the Stateometer is based on an annual comparison of indicators, the sharp downturn in the second quarter of 2020 means the base effects are very strong for the corresponding period in 2021.
Broad-based strength was seen across the board in the labour market and consumption also accelerated. Housing broadly consolidated and trade expanded.
New South Wales and Victoria outperformed other regions, partly due to their greater weakness in the second quarter of 2020. The territories lagged, which is in large part a reflection of their resilience during the national lockdown.
Retail consumption was strong, although the third quarter has started off on shaky ground as many parts of Australia came under varying degrees of lockdown.
Mobility in Sydney and Melbourne was down, according to the Stateometer, close to the record lows of 2020. But the experience of previous lockdowns shows activity and mobility are fairly quick to normalise once they’re over.
The labour market recovered more quickly than expected from the weakest point in 2020 with only the ACT seeing higher underutilisation in the second quarter when compared with pre-pandemic.
In locked down NSW, Victoria and the ACT, the momentum should underpin a speedy recovery in the labour market once restrictions ease. And the strength in other states should offset some of the employment losses expected in locked down areas.
Among other regions, economic momentum was strong in Queensland’s economy while in South Australia all segments of the index saw sequential improvement.
The Western Australia economy sustained its strong momentum, growth in Tasmania accelerated and remained above trend, and the Northern Territory’s economic performance improved, albeit less quickly than its peers.
The ANZ Stateometer is a set of composite indices that measure economic performance across Australia’s states and territories.
For each jurisdiction, the index extracts the common trend across multiple indicators (between 24 and 32, depending on data available in the jurisdiction). The economic indicators are monthly data series and cover the consumer, business, housing, labour and trade sectors.
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.
Bansi Madhavani is Senior Economist at ANZ
This insight was produced with contribution from ANZ Senior Economists Catherine Birch & Adelaide Timbrell and Junior Economist Arindam Chakraborty at ANZ
This article was originally published on ANZ’s Institutional website
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
10 Aug 2021
03 Aug 2021