ANZ Stateometer: momentum building

Published May 20, 2021

Economic activity in all states and territories accelerated in the first quarter of calendar 2021, the ANZ Stateometer found, with all bar Victoria recording above-trend growth.

Notably, the ANZ Stateometer showed strong housing momentum across all states and territories, fuelled by low interest rates and fiscal support.

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In New South Wales, solid domestic spending has been enough to boost business confidence, but there is still a gap left by tourists. Victoria’s momentum is much stronger than NSW’s as it is still in catch-up phase from the state’s second extended lockdown.

Western Australia and the Northern Territory are doing particularly well on their housing indicators, but the mining mix in WA is much more in sync with global demand, helping the state’s critical trade component far more than NT.

Tasmania’s labour market has accelerated, and the consumer component is likely to improve in the coming months. In contrast, the labour market has deteriorated in the ACT, in line with falling public service employment.

South Australia is on the up, with positive net interstate migration and improving household spend. Queensland is also seeing increasing net interstate arrivals, underpinning broadening strength.

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Outperformer

WA was the outperformer of the index, as the state’s economic activity accelerated further above trend in the three months to March. The state’s five-day lockdown from earlier in the quarter does not appear to have held its economy back.

In NSW, the index reached its highest level since 2017. The consumer sector was the biggest growth driver, followed closely by the housing sector. The tourism-dampened trade segment and the labour market still lag, despite some improvement.

Victoria’s economic activity accelerated quickly, even in the face of the snap lockdown of February.  The housing market and business activity improved, adding to momentum. The trade and labour-market segments remain below the neutral level.

The ANZ Stateometer is a set of composite indices that measure economic performance across Australia’s states and territories.

For each jurisdiction, the index extracts the common trend across multiple indicators (between 24 and 32, depending on data available in the jurisdiction). The economic indicators are monthly data series and cover the consumer, business, housing, labour and trade sectors.

Developments across this diverse country are rarely uniform and we hope these geographically specific indices help you to see through the haze of state by state data and more intuitively piece together the state of the national economy.

Bansi Madhavani & Catherine Birch are Senior Economists and Adelaide Timbrell is an Economist at ANZ

This story is an edited version of an ANZ Research report. You can read the original version of the report HERE.