Australian states without mining riches struggling economically

Big sections of Australia untouched by the mining boom are effectively going backwards economically, according to a new report.

The report by Commonwealth Securities (CommSec) found that while the resource-rich state of Western Australia continued to profit massively from mineral exports, much of the rest of the country was struggling, Australia's ABC reported.

In fact, so strongly was WA performing that the national economy was now being viewed in terms of Australia excluding WA, according to The Australian newspaper.

Based on eight indicators — economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance and dwelling commencements — "Western Australia is clearly Australia's best-performing economy," CommSec's chief economist Craig James reportedly said.

The state leads the way on economic growth, construction work, employment, retail trade and equipment investment – and is second when it comes to population growth.

"The best way to describe the situation is Western Australia first and daylight second," he said. "So when discussing the Australian economy it is best to focus on two concepts: total Australia, and Australia excluding Western Australia."

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The ABC cited another CommSec economist, Savanth Sebastian, as saying the entire eastern seaboard was looking significantly weaker than the west.

"Without Western Australia it's clear that the Australian economy would be effectively going backwards or even just treading water," he said.

Sebastian nominated the housing sector as the weakest link in many of the country's formally powerhouse eastern states.

"We are seeing that certainly the eastern seaboard is finding conditions very, very difficult when it comes to the housing sector," Sebastian said.

"New South Wales in particular has seen the dwelling starts have been very, very weak. And it's a similar story for the likes of Queensland as well.

"You've just got to take into consideration when a new home is being built the amount of work that goes into it; the resources that are required; and then also in furnishing that new house, the tiling, the kitchens, the furniture, the floor coverings. And that all adds to retail activity."

By contrast, dwelling starts and housing finance were the only "black spots" on WA’s record, SmartCompany wrote.

Overall, the island state of Tasmania was performing poorly, with economic growth at negative 1.6 per cent and retail trade the slowest in the country.

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