Tasmania remains top economy in Australia

·2-min read

Tasmanian Premier Peter Gutwein has something to shout about when his state heads to the polls this weekend.

For the fifth quarter in a row, the island state has topped Commonwealth Securities' state of states report as the best performing economy in Australia, and again followed by the ACT.

"Tasmania and ACT solidly held positions at the top of the performance rankings and little change at the top of the rankings is expected in the next few quarters," CommSec economists Craig James and Ryan Felsman said.

"However, there is little to separate five of the other seven economies with the Northern Territory still in eighth spot."

Each quarter, they assess each state and territory on eight indicators - economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance and dwelling commencements.

Over the latest quarter, Tasmania lost ground on retail spending but gained on both housing finance and relative economic growth.

On a relative basis, the ACT fell four places on housing finance but rose one place in four other categories.

CommSec expects Western Australia will be the main challenger to the front-runners, having significant momentum from mining and home building.

In the latest rankings, WA improved five places on dwelling starts, two positions on relative unemployment and housing finance, and one place on relative economic growth.

However, the state fell five places on equipment investment and one place on retail trade.

Victoria eased from equal third to fourth position, while South Australia is in outright fifth spot from Queensland.

However, CommSec sees Queensland having scope to lift in the rankings over 2021 on an improving jobs market, rising inbound migration and increased domestic tourism demand.

Australia's most populous state, NSW, was in seventh position with the Northern Territory in last place.