CommSec Report: WA Leads Australian Economic Growth as Rate Cuts Loom
Western Australia has maintained its position as the nation's strongest performing economy for the third consecutive quarter, according to CommSec's latest State of the States report.
The April 2025 analysis reveals strong population growth and a robust labor market are driving WA's economic outperformance, while Victoria has climbed to second position, overtaking both Queensland and South Australia. The report's findings come as economists anticipate interest rate cuts that could provide relief to mortgage-sensitive states like New South Wales and Victoria.
The Key Details:
Western Australia ranks first on five economic indicators: retail spending, relative unemployment, relative population growth, housing finance, and dwelling starts
Victoria jumps from fourth to second place, leading in construction work and ranking highly in retail spending despite having the nation's highest relative unemployment
Queensland slips to third position, maintaining strength in housing finance and dwelling starts despite weak equipment investment
South Australia drops to fourth from equal second, while NSW moves to equal fifth
Tasmania (joint fifth), ACT (seventh), and Northern Territory (eighth) round out the rankings
Why It Matters
This economic snapshot arrives at a crucial moment for Australia, as higher cost-of-living pressures continue to challenge households while anticipated interest rate cuts could reshape state economic trajectories. The shifting fortunes of different states highlight how diverse factors - from population growth to housing market dynamics - create varying regional economic outcomes. For policymakers and businesses, these differences underscore the need for targeted approaches to regional development and investment strategies. The report's findings also suggest that states with strong underlying fundamentals, particularly in labor markets and housing, are better positioned to weather economic headwinds.
"Western Australia performed strongly across multiple economic indicators, as 'The West's' strong relative population growth has boosted labour and housing markets, encouraging consumers to spend," said Chief CommSec Economist Ryan Felsman.
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