Growing numbers of international students flocking to Canberra's universities helped the ACT record the second-fastest population growth in the nation in the September quarter, a key economic report has found.
The latest Deloitte Access Economic business outlook shows a combination of low interest rates and the best federal budget outlook since the global financial crisis also helped the ACT maintain its second-place spot on the economic leader board.
But the report also forecast a big fall in engineering activity due to stage one of the territory government's light rail project tapering off - though that only accounts for about one per cent of the ACT economy - and the uncertainty of a looming federal election.
Lead author Chris Richardson pointed to planning for stage two of the rail project showing it was likely to result in a similarly sized boost to the territory economy, while other large commercial projects such as ANU's Union Court redevelopment could also help deliver a stronger result.
Overall, the report showed the ACT's economic outlook was broadly positive, with potential falls in construction work over the next year mainly offset by high consumer spending tying in with increased population growth due to rising international student numbers.
Mr Richardson wrote the territory's population growth was behind only Victoria in the September quarter, despite net interstate migration from other jurisdictions continuing to be flat, while rising tourist arrivals were also helping prop up consumer spending.
"One bright spot is the resilience of the housing construction pipeline," he wrote.
"Population growth is keeping demand for housing sky high; vacancy rates are the lowest in the nation while rents are growing strongly.
"Price growth also remains in positive territory, with owner-occupiers doing much of the heavy lifting as investor activity in the market drops due to government action to restrain investor lending."
That compared to a national picture of a housing downturn in most other jurisdictions, with wages continuing to grow slowly and unemployment low, but also relatively high underemployment and a potential interest rate rise in the next 12 to 18 months.
Mr Richardson also reported that while housing starts looked to have peaked last year, the approvals pipeline picked up, suggesting housing starts and activity should increase again in the next year.
While his report noted some uncertainty given the coming federal election, Mr Richardson wrote that both parties seemed content to use the stronger budget position to fund new spending initiatives leading up to the poll.
He also wrote a change in government to the Labor Party could see an uptick in Commonwealth positions in Canberra, given the Opposition's stated intention to lift the current public service staffing cap.
But the report also sent a warning that, due to the federal budget's dependence on current high global commodity prices, should prices fall, particularly from China, it could limit the ability of any future government to boost public service numbers.