Key points
- COVID-19 variants continue to impact Australia's economy
- Tasmania again leads the states in the past quarter's economic performance
- Australia's unemployment rates are historically low across much of the country
Call it COVID-19. Or the coronavirus. Or Delta. Or Omicron.
Call it what you will, the virus has managed to spread rapidly across every Australian state over the past month. That's with the exception of Western Australia which hopes to stem the spread of COVID by remaining isolated from the rest of the country.
The pandemic is hitting supply chains, impacting international and interstate travel, and seeing some businesses forced to shutter, at least temporarily.
With that in mind, we take a look at the latest CommSec State of the States report to see which state is handling the COVID impacts best.
(CommSec is wholly owned by the Commonwealth Bank of Australia (ASX: CBA).)
Tasmania leads the charge in COVID hampered economy
According to the CommSec report, released today, Tasmania once again leads the states – and territories – as the best performing economy. That's the 8th quarter in a row the prize goes to Tasmania.
As for the rest of the nation, CBA reports "little separated the other states and territories before the [COVID] Omicron variant started influencing activity across the country".
Tasmania took first spot in 4 of the 8 categories CommSec uses to gauge economic performance. Namely: equipment investment, relative unemployment, retail spending, and dwelling starts.
The Tassie economy came in second spot in 2 other indicators: relative economic growth and construction work done.
A word from CommSec's chief economist
Commenting on the economic picture amid the continued spread of COVID, CommSec's chief economist, Craig James, said:
Australia's state and territory economies are in solid shape, well supported by strong fiscal and monetary stimulus. Unemployment rates are historically-low across much of the nation. Labour is in short supply across many industries – a reflection of current COVID-related self-isolation requirements and border restrictions.
Ahead, the country will continue to face challenges managing the latest Omicron wave with infrastructure spending continuing to be a key driver of growth in 2022.
As for Tasmania's best in show performance, James said other states could take the prize in upcoming quarters:
Tasmania has held top position in the performance rankings – solely or jointly – for eight consecutive quarterly surveys. While it is likely to remain on top in the short-term, much can change over 2022.
In fact, the Western Australian and South Australian economies have moved up the rankings, performing strongly during the pandemic, with the former benefiting from a surge in iron ore exports and prices, while the latter has benefited from strong government and business investment.
In differing ways, each state or territory will attempt to 'live with COVID' throughout 2022, potentially leading to major changes in the performance rankings.
