ACT leads nation in housing
The ACT has the nation's strongest housing construction but the softer job market could have knock-on effects across the territory's economy, according to a report to be published on Monday.
Overall the ACT economy is the third strongest, according to CommSec, which judged performance on eight indicators.
Western Australia remains the standout, leading the nation and coming first in four categories - retail trade, equipment investment, construction work done and population growth.
The Northern Territory is ahead of the ACT followed by Queensland, Victoria and NSW with little to separate them, and then a sizeable gap to South Australia followed by Tasmania.
CommSec uses decade averages to judge the ''normal'' performance.
Looking ahead, the economic forecaster expects little change in the rankings but the NT has the greatest scope for further improvement.
''The ACT economy remains third with the main strengths being dwelling starts and population growth but while unemployment is still lower than most states, it is well above 'normal' for the ACT,'' the report says.
The trend jobless rate in the ACT of 4.2 per cent is lower than all economies except the NT but compared with its 'normal' or decade-long average rate of 3.4 per cent, the jobless rate is higher in percentage terms than all other economies, affecting activity in the retail sector, CommSec says.
The national outlook for housing construction remains weak but the report says there are reasons for optimism.
''Dwelling starts are still above decade averages in three of the states and territories and again starts in three states and territories are above levels of a year ago,'' it says.
''The ACT is in the strongest position for new housing construction but activity continues to ease from highs.
''In the September quarter the number of dwellings started was 33.5 per cent higher than its decade average although starts in the quarter were almost 15 per cent down on a year earlier.
''Real wages were positive in all economies in the September quarter; strongest growth occurred in the ACT (2.7 percentage points).''
The ACT is ranked second on population growth and third on economic growth.
''The ACT remains in third spot on housing finance, down 6 per cent on the decade average, followed by NSW, down 12.4 per cent.
The focus of the Australian
sharemarket this week will be on the consumer price index and inflation figures to be released on Wednesday.
CommSec economist Craig James said he expected inflation to be fairly benign, with the underlying rate predicted to rise 0.6 of 1 per cent to around 2.5 per cent. ''The Reserve Bank at the moment wouldn't have any real concern with inflation,'' he said on Sunday.
''Because inflation is under control that leaves the door open for rate cuts should they become necessary, but I think given the optimism we're seeing globally, the potential for improvement here domestically with the home market, the Reserve Bank is probably going to remain on the interest rate sidelines.''
Treasurer Wayne Swan used his weekly economic newsletter to defend the government's economic management, saying the national jobless rate of 5.4 per cent remained one of the lowest in the industrialised world.
''Our economy has also added more than 800,000 jobs over the past five years, while tens of millions have been lost around the world,'' he said.