The Australian economy remains in a solid shape in the face of the coronavirus pandemic but Tasmania is the stand out state for the eighth quarter in a row, Commonwealth Securities says.
In its quarterly State of States report CommSec says Tasmania has again held on to top slot and is likely to remain so in the short-term, but it warns much can change over 2022.
The other state and territories followed closely together, with South Australia ranked second, Victoria third, Western Australia fourth,Queensland fifth, NSW sixth, the ACT seventh and the Northern Territory eighth.
"The Western Australian and South Australian economies have moved up the rankings, performing strongly during the pandemic," CommSec chief economist Craig James says.
WA has benefited from a surge in iron ore exports and prices, while SA has enjoyed strong government and business investment.
Each quarter CommSec assesses state and territory economies on eight key indicators - economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance and dwelling commencements.
Tasmania leads on four of the eight indicators - equipment, unemployment, retail spending and dwelling starts - and ranks second on another two - economic growth and construction work done.
"Lockdowns have weighed on the economic performances of NSW and the ACT in the last survey," Mr James said.
"While both of these economies could scale the rankings again, new challenges are presented by COVID-19 restrictions and the resulting labour shortages - not just for NSW and the ACT but for all economies."
He expects the opening of domestic and international borders is also likely to further support the Queensland economy.
Mr James said all Australia's state and territory economies are in solid shape, supported by strong fiscal and monetary stimulus with unemployment rates 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," he said.
"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."
Australian Associated Press