ACT's economic ranking dips following unemployment spike

Canberra has dropped to third in Commsec’s new State of the States report. Photo: Michelle Kroll.

The ACT has dropped to third in Australia’s economic rankings following a spike in unemployment against the national trend, CommSec’s new State of the States report has revealed.

The Territory’s unemployment rate jumped 1.3 percentage points in June to 4.9 per cent, the ACT’s second consecutive monthly increase.

While the ACT’s unemployment rate is on par with the national rate, and is slightly better than NSW and Queensland, the Territory is used to having the lowest unemployment in the country.

The Territory also experienced the lowest wage growth of just 1.3 per cent in the March quarter, according to CommSec.

But the ACT was able to maintain silver on the back of the strongest retail spending in the nation – up almost 18 per cent compared to the quarter’s decade average – and a spike in new dwelling starts.

The ACT leapt three places to second, with construction commencement up 42 per cent compared to decade averages, the quarterly report found.

But Canberrans are also borrowing more money to crack into the housing market, with the value of home loans almost doubling the decade average. House prices spiked almost 20 per cent in the past year.

CommSec’s chief economist Craig James said it was important to note that all Australian jurisdictions demonstrated strong economic performances in an environment marred by COVID-19, lockdowns and border closures.

Apart from Tasmania, which led the nation in four out of the eight indicators used to measure economic performance, he said little to separate the other seven economies.

“When assessing overall economic performance, the important point to make is that all state and territory economies are performing well, supported by highly stimulative fiscal and monetary policies.

“Despite constant challenges from COVID-19, activity is solid, especially in construction, while job markets continue to improve.”

Across Australia, Tasmania was ranked first, followed by Victoria, the ACT, South Australia, NSW, Western Australia, Queensland and the Northern Territory.