Western Australia has the country’s best performing economy, according to analysis.
CommSec’s latest State of the States report shows WA topping Australia’s economic leaderboard for a third time in a row.
Released quarterly, the CommSec report determines which state or territory is performing best by tracking eight key economic indicators: economic growth, equipment investment, construction work, population growth, housing finance, dwelling commencements, retail spending, and unemployment.
Commodities and tourism-heavy WA ranked first on five of the indicators: retail spending, population growth, housing finance, dwelling commencements, and unemployment – the lowest of all states at just 3.5 per cent in March 2025.
“Western Australia performed strongly across multiple economic indicators, as the west’s strong relative population growth has boosted labour and housing markets, encouraging consumers to spend,” CommSec’s chief economist Ryan Felsman said.
The report confirms WA as “the engine room of the national economy”, said Premier Roger Cook. Treasurer Rita Saffioti said the results reflect the government’s focus “on growing and diversifying the economy, creating jobs, and boosting local manufacturing”.
Victoria, meanwhile, leapfrogged both Queensland and South Australia to move up from fourth to second place, leading on construction work done and ranking second on retail spending and third on relative population growth. However, Victoria finished bottom of the table on unemployment.
Slipping one spot to third place, Queensland performed well across the housing finance, dwelling starts and retail spending indicators, despite weak equipment investment.
Dropping from equal second to fourth position on the CommSec leaderboard, SA ranked second on three indicators but the state was held back by lower rankings on economic growth, equipment investment and relative population growth.
In joint fifth spot – leading on equipment spending – Tasmania. In response, Treasurer Guy Barnett said the CommSec report shows the government is keeping the state economy strong and resilient in the face of national headwinds.
“Tasmania is leading the nation in business confidence, and this report showing our state having the strongest equipment investment in the country reaffirms that.”
The report shows there is confidence in the Tasmanian economy, Barnett said. “This report demonstrates that Tasmanian businesses are continuing to invest, and Tasmanian consumers continue to spend despite the tough economic conditions nationally.”
Elsewhere in the State of the States report, from sixth position last quarter New South Wales joins Tasmania at equal fifth and now ranks first on economic growth.
The Australian Capital Territory remains seventh on the leaderboard while the Northern Territory stays in eighth place.
“Overall, the economic performance of Australia’s states and territories is being supported by a strong job market, robust government spending and solid population growth at a time of higher cost-of-living pressures. Economic growth has slowed however, as consumer spending remains subdued due to still-elevated borrowing costs,” Felsman said.
“As we look ahead, an expected reduction in interest rates could boost economic sentiment in the mortgage-sensitive states of NSW and Victoria, while the interplay between interest rate cuts, federal election outcomes, and global trade dynamics will be crucial in shaping the economic outlook.”
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