State economy lagging Victoria leads rest but some positive signs

QUEENSLAND’S economy is lagging southern states, including Victoria and New South Wales, which continue to outperform in key areas such as construction, housing starts and retail spending, according to the latest Commsec State of the States report.

Queensland’s economic performance ranked fifth behind Victoria, Tasmania, NSW and the ACT, unchanged from the previous quarter. Only South Australia, Western Australia and the Northern Territory performed worse.

But Commsec chief economist Craig James said there were several positive signs the Queensland economy would perform better in the longer term with population growth increasing and unemployment falling.

Victoria remained the best performer, taking into account economic growth, retail spending, equipment investment, unemployment, construction work, population growth and housing finance.

Mr James said that in terms of economic growth, Queensland remained in third position.

Retail spending in Queensland came in at fifth spot and was 9 per cent above decade averages.

Queensland was the second-worst for investment in equipment with a 3 per cent decline in the September quarter compared with the decade average. Dwelling starts were 18.2 per cent below the decade average.

The construction sector continues to suffer in Queensland, with work performed in the September quarter 24.2 per cent below the decade average.

That contrasted with Victoria and NSW, where construction work was 26.2 per cent and 20.8 per cent above the decade average.

Bright spots for Queensland included unemployment, with the state having the lowest trend jobless rate in 10 months at 6 per cent, and population growth, which is now up 2.3 per cent on the decade average.

Actual population growth is 1.71 per cent, the second fastest after Victoria with 2.05 per cent growth.

“Population growth is a positive sign because it means more people are moving to Queensland for work, which will translate into demand for housing and retail spending,” Mr James said.