Economic momentum across Australia’s states and territories slowed in the three months to September, the ANZ Stateometer Index found, although activity remained largely above trend, and signs point to strength in the final quarter of calendar 2021.
Easing restrictions across the country point to a rapid economic rebound, based on ANZ-observed spending data, labour-market movements and the progressive border reopening. This gives ANZ Research confidence states and territories will see strong economic outcomes in coming quarters.
Across all states, closed international borders and stronger household savings rates will act as a perfect storm for strong spending, particularly on the east coast, where retail activity has been suppressed by lengthy lockdowns.
The ANZ Stateometer Index saw momentum decelerate in all states and territories in the three months to September, with New South Wales and the Australian Capital Territory dropping below trend.
Victoria appeared to perform well despite its lockdown but this was based largely on its soft performance in the previous corresponding period, while Queensland, South Australia and Western Australia were only bruised by their much shorter lockdowns.
Tasmania and the Northern Territory also continued to perform above trend, despite softening in the consumer component.
The ANZ Stateometer is a set of composite indices that measure economic performance across Australia’s states and territories.
For each jurisdiction, the index extracts the common trend across multiple indicators (between 24 and 32, depending on data available in the jurisdiction). The economic indicators are monthly data series and cover the consumer, business, housing, labour and trade sectors.
Developments across this diverse country are rarely uniform and we hope these geographically specific indices help you to see through the haze of state by state data and more intuitively piece together the state of the national economy.
Bansi Madhavani, Catherine Birch & Adelaide Timbrell are Senior Economists, and Arindam Chakraborty is a Junior Economist at ANZ
This story is an edited excerpt from the ANZ Research Stateometer Report, published November 25, 2021. Click HERE to read the full document.
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