WA tops economic rankings as Victoria overtakes rivals

Western Australia has maintained its position as Australia's top performing economy for the third consecutive quarter, according to the latest CommSec State of the States report.

Victoria has moved into second place, surpassing both Queensland and South Australia in the quarterly rankings.

The State of the States report assesses the economic performance of each Australian state and territory using eight key indicators. These include population growth, the state of the labour and housing markets, levels of government spending, and consumer activity, comparing each against the respective decade-long averages.

The report highlights that Western Australia's continued economic strength is closely tied to its surge in population growth. This trend is credited with boosting both the labour and housing markets, resulting in increased consumer spending across the state.

Chief CommSec Economist Ryan Felsman commented on the findings of the report. He said, "Western Australia performed strongly across multiple economic indicators, as 'The West's' strong relative population growth has boosted labour and housing markets, encouraging consumers to spend."

Felsman expanded on the overall condition of Australia's state and territory economies by noting the underlying factors supporting growth. He said, "Overall, the economic performance of Australia's states and territories is being supported by a strong job market, robust government spending and solid population growth at a time of higher cost-of-living pressures."

The report coincides with recent interest rate cuts, which have generated optimism for mortgage-sensitive states such as New South Wales and Victoria. While Western Australia remains at the top of the leader board, Victoria's improved standing reflects its response to these economic shifts.

Solid growth in employment and government expenditure have provided states and territories with some resilience, despite the ongoing challenges posed by inflation and living costs nationwide. The strength of many state and territory economies is also partially attributed to public sector activity and population growth, which have underpinned demand in various sectors.

The State of the States publication is utilised by analysts and policymakers to gauge regional economic health, drawing media and business attention every quarter as it benchmarks the current performance of each state and territory in relation to their ten-year norms.

Detailed state-by-state data from the report demonstrate that while Western Australia benefits from population inflows and comparatively high levels of activity in the resources and housing sectors, other states such as Victoria have advanced on the back of improved job prospects and increased consumer expenditure.

The report's findings will inform both public and private sector strategy, as trends in employment, housing, consumer behaviour, and investment are likely to impact government planning and business decisions in the short to medium term.