The ACT now clearly occupies the position of best-performing economy in the nation, according to CommSec's Economics Insight survey for April 2010.
In the previous survey conducted in January, ACT and Western Australia shared the top spot, but solid housing and broader construction activity in the territory has driven economic growth and kept unemployment at historically low levels.
"The strong performance of the ACT economy highlights the value of having a powerful growth driver," said Craig James, chief economist at CommSec and the author of the survey.
He largely attributed the WA economy's slide from the top spot to last year's US financial crisis. "The crisis led to slower activity in the resources sector, affecting unemployment, population growth and housing activity," James said.
Queensland dropped from fifth to seventh place on the economic league table for similar reasons, plus weak growth in the tourism sector.
The Northern Territory economy has also been feeling the effects of last year's financial crisis in terms of weaker commercial and engineering construction, yet it jumped from seventh position to fourth as a result of low unemployment, rising home prices and strong retail spending.
The survey placed South Australia third on the economic leader-board, as it benefitted from the strongest population growth in 32 years, as well as low unemployment and solid construction activity.
Meanwhile, Tasmania slipped to fifth place as a result of slightly weaker readings on population growth, unemployment, housing finance, retail spending and overall economic growth.
While Victoria's main strength is its housing sector, with strong population growth driving housing demand and prices, investment appears to be the main drag on its overall economic ranking. "Still, there is little to separate Victoria, NT and Tasmania in the mid section of the economic league table," added James.
NSW still occupies the bottom spot of the economic performance table, with the economy lacking a key growth driver. "But population growth is well above longer-term averages and there's a shortage of housing, so that potentially opens up an avenue of growth in coming quarters," James said. Dwelling starts in NSW are currently up 22% on a year ago.
Looking ahead, James said it will be difficult for the ACT to maintain the top position, as building work is gradually completed. WA still appears to have the best prospects of all the states and territories - benefitting from strong demand for resources, especially from China and, more broadly, Asia.
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