A weakening jobs market has put a drag on the ACT's economy despite leading the nation in home lending and recording high retail spending, new figures show.
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It was ranked third among states and territories in the latest CommSec State of the States report measuring economic health, dropping from second place after it trailed the nation last quarter on employment growth.
Although its rank fell, the territory had the second-highest rate of dwelling construction starts and its population boom fuelled its economic growth, which was 25.2 per cent higher than the decade average.
The ACT also recorded the third-highest retail spending, up 12.1 per cent on its average for the last decade, trailing only the report's top two performing economies, first-placed NSW and Victoria (second).
Despite a low jobless rate, at 4.4 per cent, Canberra's unemployment was 18.2 per cent higher than the decade average of 3.7 per cent, dragging the territory from fourth to seventh on the unemployment performance ranking.
The ACT's annual population increase of 1.71 per cent was second only to a booming Victoria, where the count was 2.4 per cent higher than a year ago, and the growth rate 19.4 per cent above the decade average.
But the territory's housing finance commitments were up 22.4 per cent on the decade average, leading the country and indicating strong real estate activity and housing construction.
Only NSW eclipsed Canberra in dwelling starts, up 21.4 per cent in the ACT.
While NSW stayed on top of the economic performance rankings, the CommSec report said it may receive a challenge from either Victoria or the ACT over the coming year.
The findings come a week after a report from consultants Deloitte said the ACT economy was back in a "sweet spot" after bearing the brunt of public sector cutbacks in recent years.
The quarterly business outlook report found positive signs for the capital across the housing, construction and public sectors.