Which State is Leading in Economic Activity in June 2023

Find out the top 5 state and territories that are leading in economic growth over the 4 year average. Which state you should be moving to for economic growth.

3 min read

Which State is Leading in Economic Activity in June 2023

Think of real economic growth like a report card that shows how much better a state's economy is doing compared to the year before, but with the prices of things kept constant. This means we're looking at how much more work is being done or how many more things are being made and sold, without getting tricked by prices going up or as we know it inflation.

How we measure economic growth?

Economic growth is typically measured by looking at the increase in the value of goods and services produced by an economy over time. Here's how it's commonly done:

  1. Gross Domestic Product (GDP): For countries, we use GDP, which is the total value of everything produced within the country. For states, a similar measure is called Gross State Product (GSP).
  2. State Final Demand (SFD): For more frequent updates (like quarterly), we might use SFD, which adds up all the spending within the state but doesn't include exports and imports.
  3. Adjusting for Inflation: To get 'real' growth, we subtract the effect of inflation. This gives us a picture of growth based on actual production, not just price increases.
  4. Seasonally Adjusted Terms: This means we've also accounted for regular patterns that happen at certain times of the year (like Christmas shopping or tourist seasons) to make sure we're comparing apples to apples.

Why real terms matter?

  • Measuring in "real" terms means we adjust the numbers to account for inflation, so we can compare one year to another fairly. It's like making sure you're measuring two pieces of string with the same ruler.

Real economic activity rankings June Quarter 2023

Real economic activity rankings June Quarter 2023
Source: Commsec - Real economic growth percentage change year to June 2023 on a 4-year average

Rank #1: Victoria

Victoria is like the student who's improved the most compared to their average over the past four years, scoring 7.7% in the June quarter .

Rank #2: New South Wales

NSW is just a smidge behind Victoria, with a solid 7.6% improvement in average output over the past 4 years.

Rank #3: Queensland

Queensland is right up there in third position, making it one of the powerhouse states with a solid 7.5% increase above the 4 year average.

Rank #4: South Australia

South Australia sits comfortably in the fourth rank, showcasing a commendable growth pattern with a 7.0% rise in its four-year economic average.

Rank #5: Australian Capital Territory

The Australian Capital Territory (ACT) clinches the fifth spot, demonstrating notable economic resilience with a 6.3% increase. This growth reflects the territory's strategic investments in sectors like technology, research, and public services.

Rank #6: Western Australia

Western Australia claims the sixth rank, showing a climb of 3.2% uptick in its economic performance over the last four year average level. Which is about half of the output in ACT.

Rank #7: Tasmania

Tasmania emerges at rank seven, demonstrating a modest but steady economic progression with a 2.9% increase over the four-year average. This growth is a testament to Tasmania's burgeoning tourism sector, innovative agriculture practices, and investment in renewable energy projects.

Rank #8: Northern Territory

The Northern Territory secures the eighth position, revealing a nuanced growth of 1.4% above its four-year economic average. Though modest, this growth underscores the Territory's effort in diversifying its economy, relying not just on mining but also advancing in tourism, energy, and indigenous enterprise sectors.

Annual economic growth rankings - June Quarter 2023

Chart

Queensland has experienced a remarkable year-on-year growth, with the economy surging by an impressive 4.9% over the past year. This outstanding performance positions Queensland as the leader in economic expansion. New South Wales trails behind at a notable 3.8% increase. While the slowest growth states remains in Northern Territory recording a down 2.4% over the course of the year and Tasmania slightly going backwards 0.7% over the year.

So the results are in and right now if you were to choose to move to a state for economic growth, a move to Victoria is leading the race with a move to Queensland as it's making the biggest sprint over the last year!

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