BUSINESS IN BRIEF
And the best state economy award goes to…
RESIDENTS of the Orana region will be happy to know that NSW has extended its lead as the nation’s best performing economy according to the latest Commsec State of the States report.
The quarterly report shows “The Premier State” retains the title of the nation’s number one state economy, continuing to edge out our neighbours in Victoria.
The biggest change over the past quarter has been the improved performance of the ACT, jumping from sixth spot to equal third with the Northern Territory.
Western Australia has slid down the rankings from equal third position last quarter to be now ranked fifth. While the state is top ranked on economic growth, it is let down by last placed rankings in both equipment investment and unemployment.
Queensland has dropped one spot from fifth to sixth, with South Australia remaining in seventh place. Tasmania remains at the bottom of the economic performance table in eighth place.
The rankings are based on eight key economic performance indicators: economic growth; retail spending; equipment investment; unemployment; construction work done; population growth; housing finance and dwelling commencements.
Of the eight indicators Commsec examines, NSW came out on top in six. Our improved performance in the rankings was driven by the indicators for growth, retail trade, dwelling starts and housing finance. It also helped that equipment investment and unemployment were added to the list of best performing measures, given NSW is the only state to have a jobless rate lower than the decade average.
The outlook for all the states and territories in 2016 is positive, underpinned by low interest rates, consumer spending and home building, according to the report.
School’s in for NSW
STUDENTS across Dubbo and the region will be among the nearly 800,000 students heading back to school as the summer holidaysdraw to an end this week in NSW.
More than 300 new teachers and 42 principals also began new roles in public schools across the state yesterday as the bells rang to signal the start of the 2016 school year. Schools will get an extra $113 million of additional needsbased funding this year, while $224 million will be invested to allow more teachers to mentor their colleagues in 2016, state Education Minister Adrian Piccoli says. AAP SVM/TM/SMW
Inflation one less worry for RBA
AUSTRALIA’S sovereign wealth fund is worried that policymakers around the world have only limited “firepower” to fend off another economic downturn.
Future Fund managing director David Neal says the fact that financial markets have a list of worries - in the present case China, oil prices, US interest rates and the impact of the refugee crisis on Europe - is not unusual.
But releasing the fund’s quarterly portfolio, Neal is more cautious this time around because of the limited “policy firepower” than in the past.
“Interest rates are already extremely low ... and perhaps fiscal policy more restrained across the globe, the ability to deal with a downturn is lower,” he told reporters in Melbourne on Wednesday.
The Reserve Bank (Rba)will make its first response to those concerns that have dogged markets and undermined consumer confidence since the start of the year when its board meets next Tuesday.
But it’s clear central bank governor Glenn Stevens doesn’t have to worry
about inflation.the December-quarter consumer price index rose to an annual rate of 1.7 per cent, up slightly from the 1.5 per cent at the end of September and remaining below the central bank’s two to three per cent target band for a fifth straight quarter.
“The Reserve Bank can comfortably ignore inflation and discuss merits of another interest rate cut on the economy if needed,” Commonwealth Securities economist Savanth Sebastian said. However, he is not expecting a move this year.
Other figures showed the Westpac leading index continuing to point to an economy travelling below its potential for at least the next six months.
Both Treasury and the Reserve Bank now believe potential growth is 2.75 per cent, rather than the 3.25 per cent view that was held for some time, while Westpac had been looking for this pace of growth in the first half of 2016.
“The signal from the leading index indicates that our forecast may be somewhat optimistic,” Westpac chief economist Bill Evans said.
Consumer confidence, as gauged by the ANZ and Roy Morgan, also fell 0.9 per cent in the past week - a total 3.6 per cent drop in the past three weeks.
On a more positive note, job vacancies posted on the internet grew by a seasonally adjusted 0.7 per cent in December to be 9.4 per cent higher than a year earlier.