NT fast catching up with WA: CommSec

22 Oct 2012, 12:03 am   -   Source: AAP

The Northern Territory is the big economic improver among the states and territories, fast catching up to Western Australia in the latest quarter.

The Northern Territory is fast catching up to Western Australia as the nation's top economy thanks to activity driven by a $33 billion liquefied natural gas project.

The territory passed the ACT to take second spot, courtesy of solid economic growth, a strong job market, firm retail spending and stronger new home construction starts, Commonwealth Securities (CommSec) says in its quarterly analysis of the states and territories.

"Western Australia remains Australia's best performing economy. But the Northern Territory is coming up fast," report author and chief economist Craig James said on Monday.

Japan's Inpex and France's Total are developing the landmark Ichthys LNG project at Darwin and it's the second most expensive development undertaken in Australia.

Each quarter CommSec uses eight key indicators to analyse the state and territory jurisdictions - economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance and dwelling commencements.

Western Australia is still first or second on seven of the eight indicators, leading the way on construction work, retail trade, population growth and equipment investment.

The only real weakness is home building starts, where it ranks seventh.

While the ACT is little changed from three months ago, supported by solid dwelling starts and above-average population growth, Mr James expects the capital could drift back to the next grouping of the big three states due to a softening jobs market and weak investment spending.

NSW was the other "big improver" in the quarter through firmer population growth and relatively low unemployment, which has boosted dwelling starts, to now rank alongside Victoria and Queensland.

Victoria has seen some slippage because of higher unemployment, while Queensland also lost ground because of a weaker job market, which is affecting housing finance.

There is then a sizeable gap in the rankings to South Australia.

The best ranking of South Australia is fourth for population growth, but it ranks fifth or sixth on most indicators and is weakest on dwelling starts.

"The decision by BHP Billiton not to proceed on the Olympic Dam expansion in the short term will affect momentum in the economy," Mr James said.

After another sizeable gap, Tasmania remains firmly in last place, lagging all other economies on five of the eight indicators.

Weak population growth and rising unemployment continued to restrain its retail spending and overall economic growth, he said.

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