Mining is helping the economies of Western Australia and the Northern Territory pull ahead, but Queensland has slipped into second gear, with a 'three-speed' economy starting to emerge, according to CommSec.
In its latest State of the States report Commsec said WA was the best performing state in the nation followed by the NT, and both regions were expected to hold onto top spot throughout 2013.
The ACT came in third strongest, slightly ahead of the three largest states: New South Wales, Victoria, and Queensland.
Tasmania remains locked firmly at the bottom of the rankings, while South Australia is running second-last.
Overall the latest Commsec report showed while mining activity may be cooling from the highs of previous years, the industry remains vital to the economy and its influence continues to separate strong and weak performers.
“Increasingly Australia's state and territories appear to be breaking into three distinct groups,” Commsec said.
“The key mining economies of WA and the NT are preforming strongly and are firmly fixed at the top of the economic leader-board.
“For the bottom grouping of states – TAS and SA – joint action by the Federal Government and the individual state governments will probably be necessary to lift economic momentum and overall performance.
“Without concerted action to boost economic activity, the risk is that a widening gap emerges between the strongest and weakest regions, entrenching problems over the medium and longer term.”
All eyes on WA and the NT
Positive numbers in economic growth and retail trade helped the NT to pull into second place behind WA in the state rankings.
Overall WA again led the pack on equipment investment, and it was joined at the top by the NT, with both states showing their resilience by posting growth on the same period last year.
While all states posted positive equipment investment, spending for the December quarter was lower than a year ago in TAS, SA, QLD, and NSW.
TAS was also the weakest on construction work, with overall activity coming in 7.2 per cent above the decade average.
Next weakest was VIC, where work was 19.2 per cent above the decade average, followed by SA, which was up 25 per cent on the decade.
“At the other end of the scale is Northern Territory where construction work is almost double (up 90.9 per cent) on the decade average as well as being up 97.7 per cent on a year ago,” Commsec said.
“Next strongest is Western Australia (up 79.2 per cent on the decade average), Queensland (up 52.1 per cent) and the ACT (up 52.1 per cent).”
Heading west and north
While population growth in all states was above normal for the quarter, the resource states of WA and the NT were again clear winners, with QLD also posting strong growth.
“WA is the clear leader in population growth,” Commsec said.
“Not only is the annual growth rate of 3.45 per cent the strongest in the nation, it is also more than 48 per cent above the decade average.”
While QLD inched just head of the ACT in raw data, Commsec rated the ACT second in population growth due to the improvement on the state's baseline average.
“Next strongest is the ACT,” it said.
“Annual population growth of 2 per cent is third strongest and this is 34 per cent above normal.”
Overall Commsec said the data pointed to a strengthening 'three-speed' economy, with WA and the NT in the lead, and TAS still languishing at the bottom of the rankings.
And while the ACT was in third spot, weaker job and housing markets weighed on its performance, brining it closer in line with NSW, VIC, and QLD.
“Each of these economies has particular strengths but also areas where it could be performing better,” Commsec said.
“For instance NSW has a solid job market and rising population growth, but overall economic growth is near the bottom of the leader-board with retail spending and construction work.
“Victoria continues to perform well on housing indicators – new finance commitments and dwelling starts.
“But commercial construction and engineering work are under-performing.
“In Queensland, the resources sector is supporting investment and engineering work while retail spending is in the top half of the states and territories.
“But housing activity is weaker than other economies while the jobless rate remains historically high.