A new report says the NSW economy is the worst-performing in Australia and the government must introduce initiatives to stimulate growth in housing construction, business investment and jobs.
The Sydney Morning Herald says the latest State of the States report, published today by CommSec, ranks NSW last in key economic indicators such as home building starts, construction work, unemployment and economic growth.
However, CommSec's chief economist Craig James says NSW has potential to rise from the bottom of the economic scoreboard if faster than average population growth can be translated into increased construction, retail spending and exports.
He says NSW lacks an "X factor" that would drive the economy forward, similar to the mining boom in Western Australia or the large land releases and public service employment in the ACT.
"In NSW we haven't seen a major growth driver since the Olympics," he said.
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"If there is an area for the government to do something it's addressing the significant need for new housing construction by providing incentives to developers, such as competitive payroll tax or rezoning industrial land closer to the city."
The report tried to determine how each state and territory was performing by comparing recent trend measures of growth with each jurisdiction's average level over the past decade.
Western Australia topped the board, with economic growth in the September 2009 quarter 26 per cent above its decade-average level of output thanks to solid investment spending in the mining and engineering sectors.
The ACT ranked equal first thanks to solid growth in residential construction and property sales and low unemployment.
NSW ranked last with economic activity just eight per cent above its 10-year average and higher than normal unemployment.
