Tasmanian economy leading the nation, and might stay there

CommSec says Tasmanian economy leading the nation

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Relative success against coronavirus could keep us in front.

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Tasmania's economy is the nation's best performing and the state's success against coronavirus might have it well placed to stay ahead.

That is going by CommSec's latest State of the States report, which ranked Tasmania ahead of Victoria - where the economy is now taking an extended belting from the pandemic - and the ACT.

Tasmania shared top spot with Victoria in the previous report, issued three months ago.

Craig James

Craig James

CommSec chief economist Craig James said the coronavirus crisis presented significant challenges for all states and territories.

"Some have been more successful in suppressing coronavirus cases and that may lead to relative outperformance on economic indicators in future months," Mr James said.

"Each state and territory has its unique pressures.

"For example, domestic tourism will impact the states differently.

"However, the coronavirus pandemic has demonstrated how we're all interconnected."

Mr James said infrastructure spending would be vital for generating economic momentum.

"Further, the performance of the Chinese economy will be important in driving resource and engineering sectors," he said.

Tasmania's economy led the nation on four of the eight measures used in the report.

They were retail spending, investment in equipment, unemployment against the decade average and relative population growth.

"The Apple Isle is now leading the rankings primarily due to above normal growth in population - that is, faster than the decade average - and subsequent strong demand for new homes as well as an improved relative performance of the job market and consumer spending," CommSec said.

Tasmania ranked third for economic growth and second for construction work and dwelling starts.

Some of the data used for the report was from the March quarter - before the Australian pandemic recession fully took hold - but some was more recent, including unemployment numbers from June.

PREMIER WELCOMES RESULTS

Premier Peter Gutwein welcomed the report results.

"The figures demonstrated Tasmania has the strongest job market, in the most challenging times, demonstrating our responsible glide-path approach to recovery is working.

"The report highlighted that 'despite the COVID-19 shock the Tasmanian unemployment rate is only 7.4 per cent above the decade average'.

"Tasmania also ranked first on retail trade with spending 14.8 per cent above decade-average levels in the March quarter, with our strong relative population growth and home building key supports for retail spending.

"We have not sugar-coated the impact COVID-19 has had on our state, however, the strong position of our economy and budget prior to the pandemic is a pillar of strength to support our recovery.

"The government is doing everything it can to manage and mitigate the impacts on businesses, jobs, families and the Tasmanian community, and we are focused on the recovery process and getting the economy back on track and back in business.

"We will recover and we will rebuild a stronger Tasmania," Mr Gutwein said.

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