Insight
ANZ Stateometer: the tortoise & the hares
CHERELLE MURPHY, SENIOR ECONOMIST & JACK CHAMBERS, ECONOMIST, ANZ | MAY 2019
Slow-and-steady South Australia won the ANZ Stateometer ‘race’ in the March quarter, the only Australian state to record an above-trend growth rate amid rising momentum from the last quarter of 2018.
SA may not have enjoyed the mining spoils or strong house price upswing seen in other states in recent times - but neither has it suffered the hangover.
Tasmania, similarly unaffected by mining swings but subject to a substantial late housing upswing, also continued to enjoy the spoils. Overall though the Apple Isle lost momentum after a strong 2018 and slipped below trend.
Ongoing adjustments in the housing cycle continued to weigh on the bigger states and triggered policy action by the authorities. Fiscal policy has eased relative to where it was in the March quarter, APRA has loosened borrowing constraints and the Reserve Bank of Australia has signalled a rate cut in June (with another cut likely later in the year).
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“Ongoing adjustments in the housing cycle continued to weigh on the bigger states.”
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Soon-to-come
The mining states of Western Australia and the Northern Territory continued to languish below trend. The recent or soon-to-come resource export gains, a competitive Australian dollar and surprisingly solid commodity prices have not been enough to turn around the domestic malaise.
Elsewhere, New South Wales and the ACT grew at a below-trend rate but accelerated while Victoria and Queensland grew at below-trend rates and decelerated.
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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