All signs pointing up for the NSW economy

NSW-has-topped-CommSecs-economic-performance-rankings_157_6001398_0_14102064_300CommSec’s latest “State of the States” report for January 2015 shows that New South Wales has topped the economic performance rankings for yet another quarter, displacing Western Australia at the top of the table. It now shares equal first position with the Northern Territory, as strong performances in the housing sector continue to buoy retail spending.

CommSec analyses a wide variety of key indicators to garner the economic performance of Australia’s states and territories, comparing their latest readings with averages over the past decade. The figures reveal markedly positive signs for NSW’s economy, with retail spending indicators up 16.2 per cent over the decade average in the September quarter – encouraging signs for an already large and growing market.

“Last quarter NSW stood on top of Australia’s economic performance rankings for the first time since July 2011. And NSW has maintained its position this quarter,” said CommSec Senior Economist Craig James. “Over the past quarter, NSW has improved its position on retail spending to consolidate its position at the top of the economic performance rankings.”

As well, NSW sits in second place for business investment, dwelling starts and unemployment; and fourth on housing finance and overall construction. It appears to have fallen slightly behind on economic growth, but this is not likely to be a sign of stagnation. Indeed, CommSec indicates NSW has the fastest annual economic growth rate of any state – up by 3.9 per cent on a year ago.

The same goes for population growth. NSW’s growth rate may sit in fourth at 1.47 per cent, but this is 22.8 per cent above the decade average. CommSec also said that, along with WA, ACT and Victoria, trend housing finance commitments are up on decade average. This augurs well for the state’s economic outlook, both in 2015 and beyond.

“Housing finance is not just a leading indicator for real estate activity and housing construction but also is a useful indicator of activity in the financial sector,” Mr James said.

The combination of steady population growth and improving housing finance can offer property investors a great deal of encouragement for the years ahead. Dwelling starts are already up 46.3 per cent on the decade average, with the follow on effects likely to positively impact retail trade, unemployment and economic growth figures.

All in all, NSW’s economic future looks a sure thing.

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