Where is Australia’s new economic powerhouse?

Resource-rich Western Australia has been knocked from its long-held number one position as the country’s strongest economic performer.

According to the latest CommSec’s State of the States report, New South Wales has surged to the top of the state economy rankings.

Western Australia has held the top spot since the bank’s July 2011 report.

It is a clear sign of Australia’s changing economy, with the baton being passed from mining construction to mining production and home building.

Resource economies are still strong economic performers, but the momentum is now with other economies, the report says.

That momentum has propelled the New South Wales economy up from its number three position in the last report.

And the reason for the momentum is housing because New South Wales is currently playing catch-up after years of under building, the report says.

However, while the times may be a-changing, the mining investment fuelled economies of Western Australia and the Northern Territory are still sitting just behind New South Wales (in second and third places respectively).

The report does note that problems attracting labour to the top end remained a constraint on growth for the Northern Territory.

Victoria and Queensland make up the second trier grouping, with little to separate them in the economic performance rankings.

Relatively high unemployment is caping growth in the Victorian economy, although high population growth is underpinning home building.

Queensland’s economy is being constrained from a broad-based lift by a soft job market and relatively slow population growth.

The ACT economy has moved down to join the third tier grouping with South Australia and Tasmania.

In fact, such has been the loss of momentum in the ACT’s economy – due to a weaker job market and loss of consumer confidence – that it is now sitting below South Australia in the rankings.

While the South Australian and Tasmanian economies do continue to struggle, the report says there were some encouraging signs for both states, including an easing in their unemployment rates. 

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