The CommSec State of the States report, released today, was less bullish about South Australia, with the state easing from fourth to fifth in the regular ranking of economic performance.
Of the eight indicators, South Australia was ranked a middling fourth on half of these.
Housing and construction, retail, economic growth and business investment were identified as performing above the decade average, with population growth and unemployment among the negatives.
CommSec said that while South Australia dropped one place, “rather than weakening, it loses fourth position to a strengthening Tasmanian economy”.
“South Australia is doing better than many people realise – much better,” the report says. “Although there are undoubted challenges, including in energy, and the car manufacturers only just shutting up shop, South Australia’s economy is growing at about its fastest rate for this decade so far.”
Deloitte’s optimism is based on looking beyond “headline hugging” negatives, such as the closure of Holden’s manufacturing plant, to the “less newsworthy positives”, notably business investment.
“After a dip in 2016, where business investment represented just a tenth of the State’s economy, South Australia is climbing out of the depths and into the light,” the report says. “In fact, at around 12% of the economy, business investment in South Australia is just shy of the Australian average – and that hasn’t been true for a long time.”
Small business confidence was at its best since 2013 and the new business survival rate was higher than any other state.
“This is all filtering through to jobs, where the news has been steadily getting better since mid-2015,” the report says. “In the final months of last year, South Australia’s full-time employment growth was beaten out only by the ACT.
“And while total job growth in the State wasn’t as high as in some States (only higher than Tasmania and the mining belt – Western Australia and Northern Territory), this equates to a fall in underemployment as part-time workers get upgraded to full-time positions.
“As a result, the unemployment rate in South Australia has also drifted downward.”
Deloitte says that, as a result, “it’s no surprise then that South Australia’s economy is growing at about its fastest rate for this decade so far”.
Engineering construction has some bright spots, despite being tamer than some of the eastern states, while the value of commercial construction increased over the past year.
Originally appeared in Indaily 29 January 2018
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