Growth in Australia’s states began to slowly recover during the September quarter, according to the latest ANZ Stateometer, with the exception of Victoria, which remained in lockdown due to the impact of the COVID-19 pandemic.
The rest of Australia, which saw varying levels of re-opening, recovered ground in the wake of a very weak June quarter. But growth was subdued, with most states/territories below trend. The one exception was Tasmania, which returned to a just-above-trend rate with most indicators, especially the labour market, improving.
The jobs recovery was consistent everywhere except Victoria, surprising us with its strength. In October, a very strong rise in employment (including in Victoria) suggests this factor will lift the December quarter readings, despite Tasmania’s job recovery petering out a bit.
The consumer components contributed positively to all states and territories except Victoria and the ACT. In the ACT, this component was strongly above trend in the June quarter.
The recovery comes after pandemic restrictions caused most of Australia to slip into recession in the first half of 2020.
Gross State Product contracted in NSW (-0.7 per cent), Vic (-0.5 per cent), Qld (-1.1 per cent) and SA (-1.4 per cent) in 2019-20. The strongest growth was in NT, which expanded 5.3 per cent, helped by a very strong lift in LNG exports. WA’s economy expanded 1.4 per cent, the ACT’s 2.4 per cent and Tasmania’s 0.3 per cent.
ANZ Research normally publishes GSP forecasts for 2020-21 at this time, but these have been delayed until after the September quarter national accounts are released in early December.