The ACT economy has developed excellent momentum following recent cuts in interest rates but the housing construction sector is pulling back ''pretty sharply'', according to a report to be published on Tuesday.
However the territory has earned a reprieve with the Treasurer, Wayne Swan, retreating from drastic cuts to get the federal budget back to surplus this financial year.
The Deloitte Access Economics Business Outlook says wages growth in the ACT public sector is strong - ''only a whisker'' behind the mining sector.
''In other words, to date federal cuts have had a relatively modest impact on Canberra's economy, though job vacancies peaked in the first half of 2010 and have been sliding steadily ever since, while employment levels have been stagnant for some months now,'' it says,
The report predicts Queensland and Western Australia may have to battle a ''construction cliff'' as resource-related building work peaks.
''The ACT economy has been dodging bullets left, right and centre, with Australia's version of the 'fiscal cliff' less of a short-term challenge now that the feds have decided to hasten slowly on their way back to surplus while the interest rate cuts of the Reserve Bank have been flooding Canberra's consumers with cash,'' the report says.
''Lower interest rates have freed up the spending by Canberra's mortgage belt, leaving consumer spending, including retail, looking healthier than most other jurisdictions.
''And a slower path back to federal budget surplus partly removes the sword of Swan as an impediment to growth in 2013 and 2014.''
The Canberra-based team preparing the report says the ACT continues to face a slowdown.
''Although the news on interest rates and the federal budget mean the ACT's momentum is excellent, it will be held back by the impact of this year's stepped-up efficiency dividend on federal departments and by a developing downswing in the pace of housing construction.
''We've flagged the latter for a while and, having peaked in early 2012, the housing construction sector is already pulling back pretty sharply.
''Indeed, building approvals are dropping back and rental accommodation vacancy rates are rising, though lower interest rates have led to an increase in housing finance of late.
''However, and unlike the rest of Australia which can look forward to a recovery in housing construction activity, the ACT can expect the opposite.
''This sector is already shrinking in size and it's got further to go.''
The economic analysis says despite the retreat from a budget surplus in 2012-13, the federal budget still needs ''a fair bit of panel beating''.
''Those savings may not occur fast, perhaps particularly given that 2013 will be an election year but the further out you look, the more likely it is that the slowdown which we'd earlier predicted the ACT to feel in 2013, will merely be delayed and spread over coming years more generally.''
Engineering construction continues to be driven by two large projects - the $420 million redevelopment of Canberra Airport, due for completion late this year, and the $400 million expansion of the Cotter Dam, with the latter delayed because of industrial disputes and bad weather.
The report says the value of commercial construction work under way remains solid, with work on the $580 million ASIO headquarters and the $130 million expansion of the Belconnen markets.
''However, a number of large projects are due for completion over the coming two years with little in the pipeline to fill the void, hence we may see the value of investment under construction in the ACT drop back somewhat over coming years,'' it says.
A report released last week by CommSec said the ACT had the nation's strongest housing construction but the softer job market could have knock-on effects across the territory's economy.