Canberra's universities, population growth, low interest rates and tourism industries were the biggest drivers for the capital's economic growth last financial year, a report has found.
But the federal government's clamp down on pay rises for public servants means wage growth for Canberrans continues to struggle, with 40 per cent of the nation's public servants working in the bush capital.
The Deloitte Access Economics' Investment Monitor report, published on Wednesday, estimated the ACT's economy grew by 3.2 per cent in the 2017-18 financial year.
This was thanks to "robust population growth, low interest rates and strength in the tourism and international education sectors" and followed a 4.6 per cent gain in Canberra's economy in the 2016-17 financial year.
Along with births, international students have been one of Canberra's biggest population boosts, thanks to Canberra receiving a large number of international students in Australia.
Education was also the ACT's biggest export industry, the report said.
The rising population has meant a rise in profits for the capital's retail and hospitality industrie.
This was also thanks to a growing tourism market; visitors spent more nights and money in Canberra in 2017-18 than 2016-17.
The health sector also had bigger employment gains from the ongoing rollout of the National Disability Insurance Scheme and the opening of the University of Canberra hospital.
The report also said high levels of household debt and the federal government's decentralisation plans were the biggest risks to Canberra's economy.
While the report noted Standard and Poors had raised the ACT's credit rating outlook and said decentralisation didn't pose a large risk, Deloitte Access also said the upcoming federal election created an uncertain outlook.
"A change in government would likely see an increase in public sector employment as the [federal] Labor opposition has announced intentions to remove the public service staffing cap," the report said.
Canberra's light rail was the biggest contributor to the capital's engineering economy with overall engineering work in the ACT remaining flat.
This was expected to drop once the Gungahlin to Civic line was complete but then pick up again once the south side extension began.
The report said while railway spending in Canberra was up, spending on roads, telecommunications and utilities fell in 2017-18.
Canberra also had one of the smallest percentages of private sector projects when compared with other states.
Public sector projects, such as the light rail or the planned specialist extensions at Canberra Hospital, account for almost $3 billion of Canberra's $4.2 billion worth of projects.
The light rail project itself made up about 64 per cent of Canberra's transport project spending.
Meanwhile, private sector projects like the yet-to-be-approved Canberra Casino redevelopment, made up $1.3 billion worth of projects.
Just under a third - about 30 per cent worth - of Canberra's new projects were under consideration.
Overall, investments in the education and health sectors made up 32.7 per cent of Canberra's new industry projects, with transport making up 25.7 per cent.
Deloitte Access still forecasts growth over the coming financial years but it would slow, with the economy forecast to grow 3.5 per cent in the 2018-19 financial year and 2.4 per cent in 2019-20.