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ANZ Stateometer: slowing momentum


  • Economy





Softening economic momentum suggests credit tightness is beginning to hit smaller states.



The ongoing housing adjustment slowed down economic activity along Australia’s heavily populated east coast in the December quarter, according to the latest ANZ Stateometer.

The housing component of the Stateometer weakened in New South Wales, Victoria and Queensland. It also softened in South Australia and Tasmania where - in contrast to the three biggest states - house prices continued to expand during the period.

The consumer component deteriorated in all states and territories except Western Australia and Queensland compared to the September quarter.

Such a change suggests credit tightness – which was a catalyst for changing housing market sentiment in the larger states with a high proportion of investors – has also affected the smaller states, which are dominated by owner-occupiers.



“Credit tightness - which was a catalyst for changing housing market sentiment in the larger states - has also affected the smaller states.”



At a state level South Australia grew at an above-trend rate and accelerated. Tasmania grew at an above-trend rate with slowing momentum and Western Australia grew below-trend but accelerated.

New South Wales, Victoria, Queensland, the Australian Capital Territory and the Northern Territory all grew at below-trend rates and decelerated.

There was some good news in Victoria and South Australia’s labour markets, which continued to expand at an increased rate.

Most of the Western Australia components (consumer, household, business and labour market) also found renewed momentum, suggesting the state is adjusting positively from the mining construction boom.

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

The index for each jurisdiction extracts the common trend across 37 economic indicators using principal components analysis. The economic indicators are all monthly data series and cover business and household activity, the labour market, the housing market and trade.

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.

Cherelle Murphy is a Senior Economist & Jack Chambers is an Economist at ANZ.



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