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From: AAP January 11, 2010 2:56AM

Western Australia has the nation’s fastest growing economy, buoyed by mining

Growth economies revealed
WA and ACT at the top
NSW the nation’s poorest performer

AUSTRALIA’S largest state and the nation’s smallest territory would on the surface appear to share little in common.

One has a vast supply of mineral resources that has made it the engine room of the domestic economy, thousands of kilometres of coastline and a capital city regarded as the most isolated in the developed world.

The other is situated neatly between Sydney and Melbourne, is about 150 kilometres from the Pacific Ocean and has about half its land set aside as nature parks and reserves.

So comparisons between Western Australia and the Australian Capital Territory are stark, but CommSec says in terms of economic performance they cannot be split at the top of the pack.

CommSec chief economist Craig James said based on eight key indicators, WA and the ACT are Australia’s two best-performing economies.

“Western Australia is the fastest growing economy, buoyed by mining-related construction and investment,” Mr James said in a research note.

“And solid growth in residential construction and property sales has propelled the ACT to the top of the economic rankings.”

Mr James said he expected WA to remain in the lead in early 2010 as the state benefitted from the strong recovery in the Chinese economy, but the outlook for the ACT was not as certain.

“The ACT and Tasmanian economies may slip modestly down the leader-board as the global economy recovers, with Queensland and Victoria having the greatest potential to move up the rankings,” Mr James said.

The eight indicators were economic growth; retail spending; business investment; construction work done; population growth; housing finance; dwelling commencements and unemployment.

WA topped three categories – economic growth, business investment and construction work, while the ACT was judged the best in terms of housing finance and dwelling starts.

New South Wales came in last in four categories – economic growth, unemployment, construction work and dwelling starts.

In terms of the overall standings, Tasmania held the title three months ago, but has slipped to third.

Mr James said smaller states and territories such as Tasmania and the ACT have not suffered as badly as the bigger states during the US financial crisis.

South Australia fell from second to fourth, while Queensland was one spot back in fifth place.

Mr James said Victoria was one of the big improvers over the past three months, climbing one rung into sixth.

Northern Territory was seventh, while Australia’s most populous state NSW was the nation’s worst performing economy.

Mr James said NSW had the potential to lift off the bottom of the economic leader-board if faster population growth could be translated to increased construction, investment and overall economic growth.

“NSW should benefit from the ending of the US financial crisis via a stronger job market,” Mr James said.

“But it is a long way behind the other states and territories due to the stagnant activity in the construction sector.”