Queensland's economy is now the best performing in the country, CommSec's State of the States Report reveals

Strong interstate migration and job growth propelled Queensland to its top spot in the CommSec’s Quarterly State of the States Economic Report.

New South Wales and Victoria were tied for fourth on the report’s eight key indicators, while Tasmania slipped from first to second place overall, with South Australia ranking third thanks to strong growth in construction.

CommSec Chief Economist Craig James said strong labor and commodity markets at a time of rising interest rates have supported economic performance in all states and territories.

“In terms of future economic performance for all state and territory economies, much will depend on how the housing and labor markets perform in an era of higher interest rates,” James said.

“We have been conducting state surveys for 13 years and for the first time in those 13 years Queensland came in number one.”

The report uses the latest information available to provide an economic overview of each region by comparing annual growth rates for eight key indicators:

Economic growth
Retail expenses
Material investment
Unemployment
Construction
Population growth
Housing finance
Dwelling beginnings

“In terms of five of the eight indicators, Queensland is either number one or number two, so it’s a very consistent performance,” Mr James said.

South Australia ranked first in housing construction and starts, with residential, commercial and engineering work completed 23.8% above the state’s 10-year average .

Plant and equipment investment was strongest in Tasmania, with spending up 76.8% on the decade average.

Western Australia led all states and territories in relative economic growth, with activity in the year to September 2022 36.6% above the 10-year average.

Population growth “a strength or a weakness”

He said migration from New South Wales and Victoria during the pandemic had been “a big driver”.

tall towers are reflected in the water on a beach — Queensland’s population grew by a further 2% this quarter.(ABC Gold Coast: Dominic Cansdale)

“But the other things that happened are the strength that we saw [in Queensland] in the energy and mining sector, but also in tourism.”

Mr James said there was enough momentum to indicate Queensland would continue to perform well throughout 2023.

Fabrizio Carmignani, professor of economics at Griffith University, said the report showed Queensland was “on a good trajectory”.

Professor Fabrizio Carmignani stands in a hallway smiling wearing a suit and red tie — Professor Fabrizio Carmignani says the report shows strong economic performance across all states and territories.(Supplied / Griffith University)

He said interstate migration would continue to be a strong driver for Queensland in the future, but warned it would depend on creating the right infrastructure to ensure “level playing field”.

“Population growth can be a strength or a weakness,” he said.

“It depends a lot on the type of interventions, the type of investment that is put in place around this population growth, thinking about physical infrastructure, but also economic infrastructure, social infrastructure.”

Professor Carmignani said housing supply will continue to be a key pressure point in this regard.

“It’s a challenge. This, however, has to be seen in the context of the very particular global economic conditions that we are experiencing.

“These kind of shocks or shocks that hopefully will be absorbed as the global economy continues to recover from what we’ve had in recent years.”

Australia “a unique economy”

Victoria topped the quarterly retail spending rankings, suggesting the state was having a “quick rebound” from the COVID crisis.