coast to coast december 2011

8/3/2019 Coast to Coast December 2011

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WestpacCoast-to-CoastDecember 2011

An update on Australia's state economies

InstitutionalBank.


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2

Westpac Institutional Bank is a division of Westpac Banking Corporation ABN 33 007 457 141. Information current as at date above. This information has been prepared without taking accountof your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or

needs. Westpacs financial services guide can be obtained by calling 132 032, visiting www.westpac.com.au or visiting any Westpac Branch. The information may contain material provided directlyby third parties, and while such material is published with permission, Westpac accepts no responsibility for the accuracy or completeness of any such material. Except where contrary to law,Westpac intends by this notice to exclude liability for the information. The information is subject to change without notice and Westpac is under no obligation to update the information or correctany inaccuracy which may become apparent at a later date. Westpac Banking Corporation is registered in England as a branch (branch number BR000106) and is authorised and regulated by TheFinancial Services Authority. Westpac Europe Limited is a company registered in England (number 05660023) and is authorised and regulated by The Financial Services Authority. If you wish tobe removed from our e-mail, fax or mailing list please send an e-mail to [email protected] or fax us on +61 2 8254 6934 or write to Westpac Economics at Level 2, 275 Kent Street,Sydney NSW 2000. Please state your full name, telephone/fax number and company details on all correspondence. 2011 Westpac Banking Corporation. Past performance is not a reliableindicator of future performance. The forecasts given in this document are predictive in character. Whilst every effort has been taken to ensure that the assumptions on which the forecasts arebased are reasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. The ultimate outcomes may differ substantially from these forecasts.


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3

Contents

Overview

Australian economic outlook 4States overview: sizeable divergence 6States compared and housing update 8Activity and employment: a state view 10

States

New South Wales: rate cuts boost 2012 ... 12Victoria: dropping off the pace ... 14Queensland: another strong quarter ... 16

Western Australia: liftoff ... 18South Australia: Q2's burst fleeting ... 20Tasmania: sluggish recovery ... 22Summary indicators 24

This issue was finalised on 21 December 2011

Coast-to-Coast produced by Westpac Economics

Editors

Andrew Hanlan & Matthew Hassan, Senior EconomistsElliot Clarke, Economist

Internet: www.westpac.com.au

Bloomberg: WBCE

Email: [email protected]


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4

Westpac Coast-to-Coast December 2011

Australian economic outlook

Australias economic expansion continued in 2011. However, growth was uneven across time, sectors and states. As theyear draws to an end the environment for 2012 is likely to remain challenging. In particular, world growth is forecast to slowsignificantly, from 3.9% in 2011 to 2.8% in 2012. We expect Australian GDP growth to average 2.0% in 2011, improving to 3.0%in 2012 and then strengthening to 3% in 2013 as world growth rebounds and given more accommodative policy settings. (Notethat Australias performance in 2011 was held back by severe weather disruptions to major exports, which saw the economycontract by -0.7% in Q1.)

The Westpac view on Australia is positive but not as bullish as that of the Reserve Bank. In their November Statement onMonetary Policy the RBA forecast GDP growth of 1.75% for 2011 and 4% for 2012.

A material slowdown of the global economy is underway. We have lowered our forecast for global growth in 2012 from 3.2% to2.8%. That compares with the Government's forecast of 3.5% and the next IMF forecast which we expect to be 3.25%. The broadthemes relate to Chinas difficulties with managing a smooth domestic slowdown in the first half of the year in the face of weak

export growth, Indias investment led growth model exhibiting vulnerability to a tightening in global credit availability, Japansrecovery from disaster being stunted by weak demand for its exports and the strong yen, and further deterioration in the outlookfor Europe, with spillover effects for the rest of the globe, with particular reference to East Asias manufacturing exporters.

For Europe, we continue to question whether a currency union can exist without fiscal union. Delays in the adoption of an effectivefiscal union are likely to be driven by a reluctance of the distressed members to subjugate sovereignty, and the reluctance of thestable nations to sign up for the necessary fiscal transfers. However our forecasts are built around the eventual adoption of someform of quantitative easing by the European Central Bank which would buy considerable time to allow resolution of the necessaryfiscal arrangements. Without a significant role for the ECB we would be forced to adopt an even weaker growth outlook. For ourkey major trading partner, China, we expect that the weakest data prints will be in the first half of 2012 while the authorities taketime to implement more stimulus.

We have held our Australian dollar forecast for a fall to US93 by mid year for some months but prospects of a more pronouncedglobal slowdown implies downside risks for the AUD outlook. We still see that lowpoint around midyear by which time policy

easing, particularly in China, will be gaining some traction. Of course the recent fall in inflation and the first move by the Chineseauthorities to ease reserve ratios for Chinese banks signal the turning point in policy with the authorities gradually adopting aneasing stance. Our expectation that the AUD will be back around parity by end 2012 hinges on the success of policy easing inChina and a successful intervention from the ECB. Such policy stimulus has already been exhausted in the US. We continue toexpect a form of QE3 in the US in 2012 but its effect will be nowhere near as critical for growth stability as QE1 will be in Europe.

Next year is likely to be a year when those countries which have the flexibility to ease policy will take it. For us that means lowerrates in Australia; QE in both US and Europe; and general easing of policy in China and other developing economies.

Shaping our view on the domestic economic outlook are key positives which set Australia apart from most other advancedeconomies. Notably, the mining investment boom gathered momentum during 2011 and is set to continue. Policy flexibility isanother factor, as evidence from the RBA commencing an interest rate easing cycle. The floating exchange rate is also a plus.As discussed, we expect the currency to continue playing its shock absorber role. This easing of overall monetary conditions willprovide a boost to conditions in the broader economy. This should see a more even economic expansion emerge during 2012

such that overall growth improves from a 2% annualised pace over the first half of the year to a 3% pace over the second halfof 2012.

These positives for Australia are balanced against weakening world growth, as well as a number of domestic constraints. Thedomestic economy faces headwinds: interest rates, the high dollar, stretched housing affordability, household debt and fiscalconsolidation. Together, these factors suggest the consumer, housing construction and public investment will restrain growth. Inshort, the risk is that growth will persist at a sub-trend pace for a little longer. Given this, weve lowered forecast growth for theyear to December 2012 to 3.0% from 3%. In particular, prospects for housing construction, near term, and net exports are lessfavourable than expected.

From the perspective of monetary policy we continue to stick with our forecast that the RBA will cut rates by a total of 100bps inthis cycle. Consequently there are 50bps of further easing to come. With the current developments in the domestic labour marketand ongoing uncertainty globally we expect that the next rate cut of 25bps will come in February.

Bill Evans, Chief Economist


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Past performance is not a reliable indicator of future performance. The forecasts given above are predictive in character. Whilst every effort has been taken to ensure that the assumptions onwhich the forecasts are based are reasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. The results ultimately achieved may differsubstantially from these forecasts.

Chart 1. Chart 2.

Chart 3. Chart 4.

Chart 5. Chart 6.

5


Australian economic outlook

Australia: the domestic growth mix

-2

0

2

4

-2

0

2

4

consumer housing business public demand

ppts cont'

2009 2010 2011f 2012f

ppts cont'

Sources: ABS, Westpac Economics

contributions to year end domestic demand growth

Australia: economic outlook

-3

0

3

6

9

-3

0

3

6

9

Sep-87 Sep-91 Sep-95 Sep-99 Sep-03 Sep-07 Sep-11

% ann% ann

Domestic demand (lhs) Demand, forecast (lhs)

GDP GDP, forecast (rhs)forecasts

toend '12


Household savings rate climbs

-3

0

3

6

9

12

15

-3

0

3

6

9

12

15


% income% income

Sources: ABS, Factset, W estpac Economics

Mining investment boom

0

2

4

6

8

50

70

90

110

130

Sep-86 Sep-92 Sep-98 Sep-04 Sep-10

index $bn /qtr

Terms of trade (lhs) Infrastructure ** (rhs)


** Resource projects, commencements (2 qtr avg)excluding Pluto, Gorgon &Qld coal-seam gas project (2010Q4)

Latest, Q2

Net exports contribution: -2.7ppts for year

-4

-3

-2

-1

0

1

2

3

4

-4

-3

-2

-1

0

1

2

3

4

Sep-59 Sep-69 Sep-79 Sep-89 Sep-99 Sep-09

ppts ppts

Net exports, services Net exports G & S


Contribution to annual GDP growth

Jobs market cools, unemployment rises

-4

-3

-2

-1

01

2

3

2

3

4

5

6

7

8

9

10

11

12

Nov-89 Nov-94 Nov-99 Nov-04 Nov-09

Unemployment rate (lhs)

Full Time employment * (rhs)


% chg, 6mth%

* smoothed


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6



Unwinding fiscal stimulus: NSW & Vic

-4

0

4

8

12

Sep-90 Sep-98 Sep-06

Private demand *

Public demand *

% ann

* smoothed

Demand

0

1

2

3

4

5

6

7

8

9


General government

Public corporations

$bn qtr


Public investment

Business investment

0

3

6

9

12

15

18


NSW + Vic

WA + Qld

$bn Equipment

0

3

6

9

12

15

18


NSW + Vic

WA + Qld

$bnConstruction


State overview: sizeable divergence ...

1.3

3.44.7 5.0

3.9

2.33.7

0.11.0 1.2

1.8

4.6

9.3

16.4

0

4

8

12

16

20

SA Tas NSW Vic Aus Qld WA

% ann

Jun-10 yr Jun-11 yr


Demand growth: annual The changing complexion of the economic expansion during2011 saw, as expected, a significant growth divergenceemerge across sectors, across states and within states.

There was a considerable loss of economic momentum in thesouth-eastern states of NSW, Victoria, South Australia andTasmania, where annual demand growth is now below trend.

Restrictive monetary conditions during 2011 were felt mostnotably by the non-mining states of the south-east. Interestrates weighed on the housing sector, as evidenced bydeclining established house prices, and kept consumers incheck. The Australian dollar trading at historic highs reduced

the competitiveness of trade exposed sectors.

The RBA commenced an interest rate easing cycle inNovember. This points to more balanced growth emergingfrom around mid-2012 and will act to cushion the impact ofthe unfolding global downturn.

Fiscal policy made a significant contribution to the slowdownof domestic demand in the south-east.

The Federal Government's 2009/10 stimulus package focusedon a burst of investment in school buildings. For NSW andVictoria, the spike in general government investment added1.1ppts to demand growth in the year to September 2010.

As these school building projects are completed, publicinvestment is losing altitude. This was particularly apparentin the most recent quarter. For the year, general governmentinvestment subtracted 0.7ppts from demand for NSW and Vic.This process still has some way to go, and is likely to subtractup to a further 0.5ppts off demand for these states.

Over the last four quarters, the drag from general governmentinvestment was greatest in Tasmania (-2.0ppts), followed bySA (-1.0ppt), NSW (-0.9ppts) and Vic (-0.5ppts). By contrast,WA and Qld experienced a rise in total general governmentinvestment during the year.

In contrast to the loss of momentum in the south-east, theheadline numbers report a sharp acceleration of domesticdemand in Western Australia and Queensland. Key has beenthe gathering momentum of the mining investment boom.The upswing is set to continue through 2012, as miners lookthrough current global weakness, taking a medium-term view.

Private infrastructure activity, together with equipmentinvestment (which is being boosted by the mining sector),added 6.8ppts to demand growth in Qld over the last year,following no contribution over the previous year. For WA, thefigures are 12.9ppts following -0.6ppts. Non-mining sectorconditions in these two states remains mixed.

Mixed also describes business investment in the two majornon-mining states of NSW and Victoria. Notably, equipmentspending remains broadly flat, a trend that is unlikely toimprove in the near-term given the global slowdown.


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Chart 1. Chart 2.

Chart 3. Chart 4.

Chart 5. Chart 6.

7


Jobs market correction

-4

-2

0

2

4

6

8

Nov-06 Nov-09

NSW Vic

% chg


6mth, annualised* smoothed

-4

-2

0

2

4

6

8

Nov-06 Nov-09

Qld WA

% chg

Consumer spend: shifting trends

-2

0

2

4

6

8

10

12

-2

0

2

4

6

8

10

12


% ann% ann

South East * Qld, WA, NT


latest 6mths(annualised)

* NSW, Vic, SA, Tas, ACT

Population growth: go West

-1

0

1

2

3

Jun-90 Jun-98 Jun-06

NSW Vic Tas

% ann


-1

0

1

2

3


WA Qld SA

% ann

Dwelling approvals, private

50

100

150

200

250

Oct-05 Oct-09

NSW Vic Tas

index


Jan '09 = 1002mth m.a.

50

100

150

200

250

Oct-05 Oct-09

SA Qld WA

index

Non-residential construction pipeline

0

2

4

6

8

10


South-east

Qld, WA, NT

$bn Non-res. building

Approvals qtrly

Public worksboost

0

20

40

60

80

100


South-east

Qld, WA, NT

$bnInfrastructure

Work Yet to be Done


$43bn Gorgonproject commences

Established house prices soften

-20

-10

0

10

20

30

40

50

Sep-99 Sep-07

Sydney

Melbourne

% ann


-20

-10

0

10

20

30

40

50

Sep-99 Sep-07

Brisbane

Perth

% ann

... to persist near-term


8/28


8

Chart 2.

Chart 3. Chart 4.

Chart 5. Chart 6.

Chart 1.


Business equipment investment

80

120

160

200

240

280

320

Dec-02 Dec-08

NSW Vic Tas

index


80

120

160

200

240

280

320

Dec-02 Dec-08

WA

Qld

SA

indexDec 02 = 100

Public investment, general government

40

80

120

160

200

240

280

Dec-02 Dec-08

NSW

Vic

Tas

index


40

80

120

160

200

240

280

Dec-02 Dec-08

WA

Qld

SA

indexDec 02 = 100

States compared

Consumption

-2

-1

0

1

2

3

4

5

6

Sep-05 Sep-09

NSW Vic

% chg, 2 qtrs

-2

-1

0

1

2

3

4

5

6

Sep-05 Sep-09

WA

Qld

SA

% chg, 2 qtrs


New dwelling construction

40

60

80

100

120

140

160

180

Dec-02 Dec-08

NSW Vic Tas

index

Sources: ABS, Westpac Economics40

60

80

100

120

140

160

180

Dec-02 Dec-08

WA Qld SA

indexDec 02 = 100

Business construction investment

50

150

250

350

450

550

Dec-02 Dec-08

NSW Vic Tas

index


Dec 02 = 100

50

150

250

350

450

550

Dec-02 Dec-08

WA Qld SA

index

Exports uptrend, hit by weather disruptions

-25

-15

-5

5

15

25


NSW Vic

% ann


smoothed

-25

-15

-5

5

15

25


Qld WA

% ann

Qld & WA exportshit by disruptions


9/28


Chart 1. Chart 2.

Chart 3. Chart 4.

Chart 5. Chart 6.

9


House prices under pressure

-20

-10

0

10

20

30

40

50

60

70

-20

-10

0

10

20

30

40

50

60

70


%%

Bris Melb Adel Syd Perth

Sources: RP Data-Rismark, Residex

(priorto 2004, houses only), Westpac

*six-monthly growthrates, annualised

Auction clearance rates barely at 50%

0

10

20

30

40

50

60

70

80

90

0

10

20

30

40

50

60

70

80

90


%%

Sydney

Melbourne

Sources: APM, Westpac Economics

*seasonally adjusted by Westpac

periodaverage

last 2

weekends

40

60

80

100

120

140

160

40

60

80

100

120

140

160

Dec-08Dec-09Dec-10Dec-11 Sep-09Sep-10Sep-11 Sep-12

indexindex

NSW Vic Qld WA

Source: Melbourne Institute, WestpacEconomics

*smoothed

Sentiment on time to buy up in mining states Housing affordability improves

0

10

20

30

40

50

60

70

80

90

0

10

20

30

40

50

60

70

80

90


%%

Sydney

Melbourne

Brisbane

PerthAdelaide

Sources: RP Data-Rismark,REIA, ABS, RBA, Westpac

deteriorate

improve

*measure based on servicing mortgage of75% median house price and avg wage,estimated to Sep-11

Housing update

Rental mkts: Melb loosening; Bris, Perth tighter

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

Jun-88 Jun-98 Jun-08 Jun-92 Jun-02 Jun-12

%%

Syd Melb Adel Bris Perth

Source: REIA, Westpac Economics

vacancy rates

latest

latest

*rolling annual average

Dwelling approvals: Vic down sharply

40

60

80

100

120

140

160

180

200

40

60

80

100

120

140

160

180

200

Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11

indexindex

Vic (35%) WA (13%)

Qld (17%) NSW (21%)

Sources: ABS, Westpac

smoothed, Dec 2005 = 100figures in brackets show %total


10/28


Chart 1. Chart 2.

Chart 3. Chart 4.

Chart 5. Chart 6.

10


State jobs markets, diverge

90

94

98

102

106

110

Nov-07 Nov-10

NSW

Vic

index


Dec 08 =100

NSW & Vic,flat through 2011

90

94

98

102

106

110

Nov-07 Nov-10

Qld WA

index

monthly

WA & Qldadvanced in 2011

Australia: jobs & domestic demand

-6

-4

-2

0

2

4

6

8

10

-4

-2

0

2

4

6


% ann% ann

Jobs * (lhs)

Domestic demand, adv 2qtrs (rhs)


updated 19 Dec

Jobs correction

* qtrly average

-3

-2

-1

0

1

2

3

4

5

6

7

-4

-2

0

2

4

6

8

10


% ann% ann

Domestic demand adv 2 qtrs *, lhs

Jobs **, rhs


* smoothed, ** qtrly, average

NSW: jobs & demand

-8

-6

-4

-2

0

24

6

8

10

-8

-6

-4

-2

0

24

6

8

10


% ann% ann


Jobs **, rhs



Victoria: jobs & demand

-4

-2

0

2

4

6

8

-6

-4

-2

0

2

4

6

8

10

12

14


% ann% ann


Jobs **, rhs



Qld: jobs & demand

-4

-2

0

2

4

6

8

10

-8

-4

0

4

8

12

16

20


% ann% ann


Jobs **, rhs



WA: jobs & demand

Activity and employment: a state view


11/28

11



Activity and employment: a state view

2008/09 2009/10 2010/11 2011/12f 2011/12f

Govt fcsts Westpac

Australia * GDP 1.4 2.3 1.9 3.1 2.8

Employment 1.6 1.4 2.9 1.5 0.5

NSW ** GSP 0.8 2.2 2.2 2.25 2.0

Employment 0.7 1.2 3.1 1.00 0.5

Vic ** GSP 0.9 2.3 2.5 2.25 2.0

Employment 0.8 2.8 3.5 0.75 0.3

Qld GSP 0.6 1.7 0.2 5.00 4.5

Employment 2.7 1.0 2.3 3.00 1.0

SA ** GSP 1.6 1.2 2.4 2.25 2.0

Employment 1.7 0.9 1.8 1.00 0.5

WA GSP 3.9 4.3 3.5 4.50 4.5

Employment 3.9 0.3 3.2 2.50 1.5

Tasmania GSP 1.9 0.4 0.8 1.75 1.0

Employment 2.9 -1.6 1.4 0.50 0.0

* Government forecasts for Australia are a weighted average of the state government forecasts. ** NSW, Victoria and SA released half year updates in December.

Westpac's state numbers are not calculated directly. They are estimated from Westpac's forecast for Australia.

Gross State Product

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12f

NSW * 2.0 2.1 2.8 3.4 1.1 1.7 2.25 2.25

Vic * 2.7 2.5 3.6 3.6 0.9 2.0 2.50 2.25

Qld 5.0 4.2 5.4 4.2 0.2 1.6 0.00 5.00

WA 4.3 5.6 4.4 4.2 4.1 4.3 4.00 4.50

SA * 1.0 2.7 2.1 5.6 2.1 1.5 3.50 2.25

Tas 2.3 2.7 2.5 4.4 3.4 0.4 1.75 1.75

NT 5.5 6.7 4.4 4.4 5.1 1.3 2.20 3.20

State Government forecasts from state budget papers. * NSW, Victoria and SA released half year updates in December.

The ABS estimates GSP only on an annual basis. History is from the 2010/11 State Accounts.

Employment

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12f

NSW * 1.2 2.0 2.1 2.9 0.7 1.2 3.1 1.00

Vic * 3.1 2.3 3.2 3.2 0.8 2.8 3.5 0.75

Qld 5.4 4.0 4.8 3.0 2.7 1.0 2.3 3.00

WA 4.1 5.5 3.0 4.1 3.9 0.3 3.2 2.50

SA * 1.6 2.5 2.0 2.1 1.7 0.9 1.8 1.00

Tas 2.5 3.4 0.8 2.9 2.9 -1.6 1.4 0.50History from ABS. Forecasts from state government budget papers. * NSW, Victoria and SA released half year updates in December.


12/28

12



The NSW state government downgraded their economic growthforecasts in the Half Yearly Budget Review.

GSP growth is now forecast to be 2% for 2011/12 and 2%for 2012/13. Both numbers were trimmed by % from theSeptember Budget forecasts. A little surprisingly, the jobsgrowth forecast for 2011/12 was left unchanged at 1%.

The state economy managed to advance by 2.2% for eachof the last two years. This is in line with the state's decadeaverage growth rate and also matched the national growthpace over this two year period.

The 2011/12 financial year got off to a mixed start. Demandexpanded by a relatively modest 0.5% in the Septemberquarter. In large part this was due to the very strong fiscalheadwinds, with public demand contracting by -3.6% in thequarter, slicing -0.8ppts off growth.

Private demand was relatively strong, expanding by 1.6% inthe September quarter. However, this followed three patchyquarters, such that annual growth is only 2.2%.

Official figures suggest that households have been spending ata reasonable clip, with consumption up 1.1%qtr, 3.6%yr in Q3.This is above the state's historic average of 3.0% annual.

The risk though is that consumption growth moderatesas wage income growth slows from the 6.0% rise over thelast year, which was a little above the historic average.Employment in the state stalled in 2011, hence the surprisethat wage income growth has held up. We expect employmentconditions to remain soft over the first half of 2012, ahead ofthe boost from lower interest rates. Parts of the key financesector are looking to boost productivity, as are firms generally.

Business investment has been relatively flat, although it isnotable that commercial loan commitments are up 25% for theyear. Commercial building has been the source of weakness.

But the cycle has turned the corner, with approvals off theirlows, boosted by the start of the $6bn Barangaroo project.Infrastructure, centred on mining projects, is in an upswing,with work up 18% on a year-ago. Equipment spending is flat.

The export sector, despite the constraint of the high Australiandollar and slowing global growth, has performed well. Volumesadvanced 10% over the year and jumped 18% over the lasttwo years. Notable is the expansion of coal mining and exportcapacity, as well as improved farm production.

The upswing in new dwelling construction re-emerged in theSeptember quarter, after a temporary pull-back over the first

half of 2011. The outlook is positive for 2012. Approvals havebeen resilient of late, in contrast with the national picture.Notably, interest rate reductions will provide a boost at a timeof low vacancy rates and rising rental prices.

Unwinding fiscal stimulus

-4

0

4

8

12


Private demand

Public demand *

% ann

* smoothed

Demand

0

1

2

3

4

5

6


General government

Public corporations

$bn qtr


Public investment

Contributions to state final demand

1.2

-0.5

0.1

-0.5

2.1

4.7

1.5

0.9

0.9

1.7

-2 0 2 4

Final demand

Public

Investment

Housing

Consumption

ppts

yr Sep 10

yr Sep 11

Sources: ABS,Westpac Economics


0

2

4

6

8

10


Work done

Yet to be done

Approvals


0

2

4

6

8

10


Work done

Yet to be done

Commencements *

$bnInfrastructure


* 2qtr avg

NSW: fiscal headwind 2011 ...


13/28


Chart 1. Chart 2.

Chart 3. Chart 4.

Chart 5. Chart 6.

13


Dwelling approvals, diverge

0

1

2

3

4

5

6

7

0

2

4

6

8

10

12

14

Oct-86 Oct-91 Oct-96 Oct-01 Oct-06 Oct-11

'000 '000

Aust ex NSW ( lhs) NSW (rhs)


3mth m.a.

Private dwelling approvals

19%yr

+11%yr

-60

-40

-20

0

20

40

60

80

-60

-40

-20

0

20

40

60

80


% ann% ann

New dwelling investment

Approvals, adv 2qtrs


Housing construction

... rate cut boost, 2012

NSW jobs market corrects

-6

-4

-2

0

2

4

6

-50

-30

-10

10

30

50

Nov-05 Nov-07 Nov-09 Nov-11

% ann'000

Jobs, mth chg (lhs) Jobs 6mth chg, annls'd* (rhs)

Sources: ABS, Westpac Economics* smoothed

Business investment

0

2

4

6

8

10

12

0

2

4

6

8

10

12


$bn$bn

Equipment *

Non-residential building

Engineering


* including computer software etc

NSW exports, lift-off

-10

0

10

20

30

-10

0

10

20

30


% ann% ann

NSW Australia

Sources: ABS; Westpac Economics

exports of goods, smoothed

WA & Qld exportshit by cyclones & flooding

-4

-2

0

2

4

6

8

10

-4

-2

0

2

4

6

8

10


% ann% ann

NSW Australia


Domestic demand


14/28

14



Victoria: dropping off the pace ...

After recording robust growth in 2010/11 the Victorianeconomy has shown clear signs of a slowdown throughthe second half of 2011 that looks set to become morepronounced as an abrupt downturn in housing constructionweighs more heavily in 2012.

The September quarter already shows signs the state isstarting to diverge from the rest of the nation. Whereasdomestic demand rose 2.1%qtr nationally to be up a brisk4.6%yr, it slipped 0.1%qtr in Victoria to be up a tepid 1.8%yr.Vic's weak result was mainly due to a sharp reversal in publicdemand (4.9%qtr, 2.4%yr) which in turn came from a near20% decline in public investment. This reflects the wind-down

in Federal stimulus programmes (mainly education and health)with some large state projects reaching completion as well.Growth in the large south eastern states has been moreheavily affected by this cycle due to higher populations andthe lower level of private investment activity compared to the'mining' states.

Private demand continued to rise at a reasonable pace in theSeptember quarter, rising 1.2%qtr, 2.9%yr a reasonable resultalbeit well off the mining-investment charged annual pace(+3.5%qtr, +6.6%yr).

Business investment bounced back in the quarter, +2.3%after a 1.6% fall in Q2. An 8.9% increase in non-residentialconstruction spending and a 2.8% increase in equipmentinvestment drove the quarterly gain. The pipeline for nonresidential construction is not promising though with bothbuilding and infrastructure well off their peaks.

So far, Vic's manufacturing-centred, AUD-sensitive anddomestically oriented business sector has not been a greathindrance to growth. Even exports have risen a surprisinglysprightly 9.5% in the year to the September quarter (althoughthat also reflects improved growing conditions for the ruralsector). Vic's business services sector has been particularlystrong and may reflect the high concentration of mining andengineering firms headquartered in Melbourne.

Household consumption rose a solid 0.8%qtr. Retail salessuggest the momentum has slowed in recent months. Althoughthis has been a poor gauge of total consumer spending inrecent years the sharp slowdown in jobs growth, which hasstalled flat since early 2011, suggests slower income growth isstarting to weigh on demand.

The biggest drag however is likely to come from housingconstruction. Dwelling investment rose 2.1%qtr in Q3 to be up6.7%yr but approvals have slumped 20%yr.

In terms of gross state product, the Victorian economy grew2.5% in 2010-11, a solid but unspectacular result. The state

government lowered its growth forecasts in its Decemberbudget update with GSP now seen rising 2% in 2011/12and 2% in 2012-13 (down from 3% and 2% respectively).Deteriorating international conditions and a faster thanexpected slowdown in employment were cited.

-8

-6

-4

-2

0

2

4

6

8

10

-8

-6

-4

-2

0

2

4

6

8

10


% ann% ann

Victoria Australia


Domestic demand growth: Vic diverges


1.8

-0.5

0.2

0.4

2.0

5.0

1.9

0.4

0.3

2.2

-2 0 2 4 6

Final demand

Public

Investment

Housing

Consumption

ppts

yr Sep 10

yr Sep 11


-6

-4

-2

0

2

4

6

8

-6

-4

-2

0

2

4

6

8

1991/92 1995/96 1999/00 2003/04 2007/08 2011/12

% chg% chg

gross state product state demand

Sources: ABS, Vic Gov't, W estpac Economics

StateGov'tf'csts*

3.5%, decade average

*from December Budget update

Victoria: economic performance & outlook


15/28


Chart 1. Chart 2.

Chart 3. Chart 4.

Chart 5. Chart 6.

15



0

2

4

6

8


work done

yet to be done

approvals

$bn non-res. building

0

2

4

6

8


work done

yet to be done

commencements *

$bninfrastructureSources: ABS, Westpac Economics

* 2qtr avg

Business investment: patchy

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7


$bn$bn

equipment

non-residential building

engineering


*new

... housing will be a drag in 2012

-40

-30

-20

-10

0

10

20

30

40

50

60

-60

-40

-20

0

20

40

60

80


% ann% ann


Approvals, adv 2qtrs

Sources: ABS, W estpac Economics

Approvalsoff their highs

Housing construction downturn looms

0.0

0.5

1.0

1.5

2.0

2.5

0.0

0.5

1.0

1.5

2.0

2.5


% ann% ann

Vic (1.5%yr, +84k)

Vic contrib from net migration (0.8ppt, +46k)

Australia


Population growth: abrupt slowdown Jobs growth moderates

-6

-4

-2

0

2

4

6

8

-30

-20

-10

0

10

20

30

40


% ann'000

Jobs, mth chg (lhs) Jobs, 6mth chg, annual'd* (rhs)

Sources: ABS, Westpac Economics* smoothed

Retail sales stall

-0.3

0.0

0.3

0.6

0.9

1.2

-0.3

0.0

0.3

0.6

0.9

1.2


% chg% chg

Vic Aust


trend, mth % chg


16/28

16



Queensland: another strong quarter ...

The boom continued in the sunshine state in the Septemberquarter with demand growth of 3.5%. That followed a 3.5%growth outturn in the June quarter and leaves annual growth ata particularly strong 9.3%, three times the annual growth paceseen just six months ago.

The primary driver of growth in the quarter was a 12% surgein business investment. Engineering investment rose by 11%in the quarter to be 86% higher for the year while equipmentinvestment rose 20% to be up 45%yr. Although non-residentialconstruction fell in Q3, it is still up 7.7%yr.

Herein, we see Queenslands mining boom in full swing.Thankfully for the state, this is just the beginning. Qld is set tobenefit greatly from the development of the LNG industry incoming years, with around $50bn to be invested. The boost tohousehold incomes that comes with the new jobs created inthis phase will also help support the broader Qld economy.

Not only will the initial spend provide a boon for activity in thestate in coming years, but once completed, these projects willprovide Qld with a sizeable new industry that will boost exportvolumes materially. As evinced by the impact the floods had oncoal exports, said development would be very welcome.

Back on the domestic front, the national accounts also pointedto strength outside of mining investment. Consumption growthaccelerated sharply in the September quarter to 1.9%qtr, morethan twice the growth pace seen in the preceding six months.However, this thesis is at odds with the retail sales data whichpoints to there being a persistent downtrend in growth of late.

Supported by the ongoing post-flood rebuild, renovationactivity jumped 10.4%qtr; growth in new dwellings wasalso healthy at 3%. That being said, the recent weakness inapprovals points to weaker new dwelling investment hence.Excluding flood-related work, it seems likely that renovationactivity will share a similar fate.

As highlighted by the Qld Treasury's Annual Economic Report,wetter than usual conditions in late 2010 and January's floodshad a material impact on 2010/11 financial year growth,leaving gross state product growth at just 0.2%. But, as notedabove, growth has now bounced back strongly and, given thelarge pipeline of investment projects, growth is expected toremain healthy hence.

That said, Qld's prospects are not solely dependent onresource investment. To that end, it will be important to remainfocused on developments in the labour and housing markets,both of which have weakened of late.

A case in point: the Qld tourism industry has been materiallyimpacted by the strength of the Australian dollar and thefloods, impacting employment in the sector. As a major long-term employer, the wellbeing of this sector will remain crucialfor the ongoing health of the Qld economy.

-9

-6

-3

0

3

6

9

12

15

-9

-6

-3

0

3

6

9

12

15


% ann% ann

Qld

Australia


Domestic demand, Qld surges ahead


9.3

0.2

7.1

0.0

2.6

2.3

1.5

0.3

-0.4

1.3

-2 0 2 4 6 8 10

Final demand

Public

Investment

Housing

Consumption

ppts

yr to Sep 2010

yr to Sep 2011


Business investment a strong growth support

0

1

2

3

4

5

6

7

8

0

1

2

3

4

5

6

7

8


$bn$bn

Equipment


Infrastructure


+79% in2011 todate


17/28


Chart 1. Chart 2.

Chart 3. Chart 4.

Chart 5. Chart 6.

17


... investment a lasting support

Retail sales, growth decelerating

-0.3

0.0

0.3

0.6

0.9

1.2

-0.3

0.0

0.3

0.6

0.9

1.2

Oct-07 Oct-08 Oct-09 Oct-10 Oct-11

% chg% chg

Qld Australia


trend, mth % chg

Flood-affected exports yet to bounce back

-20

-15

-10

-5

0

5

10

15

20

-20

-15

-10

-5

0

5

10

15

20


% ann% ann

Qld Australia

Sources: ABS; W estpac Economics exports of goods, trend

Brisbane house prices: down 5% over the year

-10

0

10

20

30

40

-10

0

10

20

30

40


% ann% ann

Brisbane

Capital cities avg.


Qld labour market has slowed markedly

0

2

4

6

8

10

12

-3

-2

-1

0

1

2

3

4

5

6

7

8

Nov-91 Nov-95 Nov-99 Nov-03 Nov-07 Nov-11

% ann %

Qld jobs (lhs) Aust jobs (lhs) un. rate, Qld (rhs)


trend

Construction investment looks set to surge

0

1

2

3

4

5

6


Work done

Work yet to be done

Approvals

$bn Non-res building

updated: 16 Sep 11

0

5

10

15

20

25

30


Work done

Yet to be done

Commencements,2qtr avg

$bnInfrastructure


Qld housing sector in very weak state

6

7

8

9

10

11

12

13

14

1

2

3

4

5


'000'000

Qld ( lhs) Australia, ex Qld (rhs)

Sources: ABS, Westpac Economics26% off peak

*smoothed



18/28

18



-8

-4

0

4

8

12

16

-8

-4

0

4

8

12

16


% ann% ann

WA Aust


State demand growth: WA goes into orbit


16.4

1.0

13.6

-0.8

2.6

3.7

1.7

0.3

0.1

2.0

-5 0 5 10 15 20

Final demand

Public

Investment

Housing

Consumption

ppts

yr to Sep 2010

yr to Sep 2011


-6

-4

-2

0

2

4

6

8

10

12

-6

-4

-2

0

2

4

6

8

10

12

1991/92 1995/96 1999/00 2003/04 2007/08 2011/12

% ann% ann

GSP state demand

Sources: ABS, WA Gov't, Westpac Economics

WA govtestimates and

forecasts*

*from state Budget

WA economic performance & official outlook

Western Australia: "lift-off"...

The mining boom mark 2 went into overdrive in the Septemberquarter with a very sharp acceleration in the most resource-driven state economy, WA. But while a dramatic surge inmining investment has already pushed state demand growth torecord highs, conditions remain extremely lopsided especiallycompared to the first boom.

WA state demand jumped 8.4% in the September quarter, overseven times the pace of growth across the rest of Australiaand accounting for about half of the 2.1%qtr gain nationally. Itis easily the strongest quarterly rise in demand recorded by amajor state and lifted the annual pace to 16.4%.

That stands in stark contrast to the more pedestrian pace ofjobs growth, which has slowed abruptly over the last year,the robust but comparatively restrained growth in consumerspending and the weak conditions in the state's housingmarket. Each of these aspects of the WA economy is showingsome signs of improvement but nothing like the capex jolt.

Business investment is driving the 'lift-off' despite the dragfrom other parts of the state economy. State businessinvestment surged 27% in the quarter alone to be 50% higherover the year. Engineering construction (+49%) led the way butgrowth in non-residential construction (25%) and equipmentinvestment (10%) was also strong. Some of the quarterlyrise may be lumpiness as work proceeds on the various'mega projects' in the state. However, the bulk of the rise isconsistent with the pipeline of activity which suggests thereare more gains to come.

Indeed, the forward view on capex remains extremely positiveif not outright daunting. There is currently $137bn worth ofprojects that are either underway or committed in WA witha further $84bn under consideration and another $47bn ofidentified projects in the 'possible' category. To put this inperspective, the current pipeline of work is 2.7 times thealready extremely high level of state business investment in2010/11 with a similar 'shadow pipeline' of considered andpossible projects.

Public investment was also supportive in the Septemberquarter, rising 11%qtr to be up 9.6%yr. Project lumpiness doesseem to have been a feature here though.

Household consumption was strong but less spectacular, rising0.9%qtr in Q3 to be up 5.7%yr. This is much stronger thanthe national pace of 3.8%yr and retail sales continue to trackat double the Australia-wide pace. However it is decidedlyrestrained given the 16%yr surge in real labour incomes.

In contrast, housing investment fell 13%qtr to be down11.5%yr. The Perth housing market has been a significantunderperformer as well, lagging the nation price-wise since

2007. There are some hints of improvement in recent monthsthough, with dwelling approvals in particular suggesting theconstruction downturn is finding a base out west. A notableuptick in population growth also points to a more positiveoutlook for both housing and consumer demand.


19/28


Chart 1. Chart 2.

Chart 3. Chart 4.

Chart 5. Chart 6.

19


WAs project pipeline

0

50

100

150

200

250

300

0

50

100

150

200

250

300


$bn$bn

Work Yet to be Done (ABS)

Under construction (Inv. Monitor)

& Committed

& Under consideration

& Possible

Sources: Deloitte Access EconomicsInvestmentMonitor, ABS, Westpac Economics

updated: 31 Oct 11

WA private capex explodes

0

1

2

3

4

5

6

7

8

9

0

1

2

3

4

5

6

7

8

9

Mar-91 Mar-95 Mar-99 Mar-03 Mar-07 Mar-11

$bn$bn

engineering construction

non- residential building

equipment

Source: ABS, Westpac Economics

*real, private sector

+49%

WA consumers take caution to ridiculous extreme

-4

0

4

8

12

16

-4

0

4

8

12

16

Jun-99 Jun-03 Jun-07 Jun-11

% ann% ann

labour income

consumption


*real

Mining boom MkI MkII

avgsince2008

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0.5

1.0

1.5

2.0

2.5

3.0

3.5


% ann% ann

WA Aust


WAs population inflow picking up again Dwelling approvals: Aus falling, WA finding a base

8

10

12

14

16

18

0.5

1.0

1.5

2.0

2.5


'000'000

WA (lhs) Austral ia ( rhs)


trend

WA jobs market: not so hot but trend turning?

2

4

6

8

10

12

-6

-4

-2

0

2

4

6

8


% ann %

WA jobs (lhs)

Aust jobs (lhs)

un. rate, WA (rhs)


*trendWA GovtForecast(year avg)

... despite drag from consumer & housing


20/28

20



South Australia: Q2's burst fleeting ...

Last quarter we noted that South Australia experienced areversal of fortunes in Q2 as growth bounced back and Q1'sdecline was partly revised away. It now seems this resurgencewas but a fleeting burst of activity.

SA had a terrible Q3: demand declined by 1.6% in the quarter,wiping out the downwardly revised Q2 gain of 1.6% note, thepositive revision to Q1 was also revised away in this quartersrelease. All told, that left annual final demand growth at just0.1%, compared to the 4.6% growth experienced at the nationallevel.

The weakness seen in Q3 was not merely the result of the

decline in public demand seen across the nation in Q3. Rather,it was also a function of weak private demand which fell 1% inQ3. Dwelling investment fell 11% in the quarter while businessinvestment declined 6.3%, largely wiping out Q2's 7.5% rise.Household consumption was the only real bright spot for SA inQ3, up 1.3% in the quarter and 1.5%yr.

However, it seems unlikely that this strength in consumptiongrowth will persist in coming quarters as fundamentals haveclearly turned against the sector over 2011.

Population growth has continued to decelerate to a mere0.8%yr in June 2011, well below the 1.3% peak seen at theend of 2009. This is a function of a material reduction in netoverseas migration this is likely at least partly due to thestrong Australian dollar's impact on the education sector.

The SA labour marker has also weakened over 2011, withannualised employment growth of just 0.1% seen over the pastsix months. Combined with declining house prices and thecurrent global environment, it is hard to believe that the Q32011 outcome is the beginning of a strong trend.

The above factors also point to a dim near-term outlook fordwelling investment. Private dwelling approvals have fallen 39%since their mid 2008 peak to be at the lowest level seen in adecade. RBA rate cuts are certainly welcome.

Business investment also looks unlikely to provide materialimpetus to SA growth in 2011/12. That said, the near-termpipeline still looks supportive of the level of activity. Thepotential commencement of the Olympic Dam project in2012/13 would provide a major boost.

The income boost provided to the SA economy in recentquarters from exporting a bumper harvest also looks to beabating. According to the SA government, the 2011/12 yieldwill be lower than that seen in 2010/11; however, that willstill see farm activity at a considerably higher level than theaverage of the past five years.

Despite the headwinds noted above, the SA governmentremains optimistic over the outlook. The 2011/12 financialyear is expected to see final demand growth circa 2.50%, amaterial step up from 2010/11's 1.2%.

-4

-2

0

2

4

6

8

10

-4

-2

0

2

4

6

8

10


% ann% ann

SA Australia


Domestic demand


0.1

-1.3

1.0

-0.3

0.9

1.3

0.8

-0.7

-0.5

1.8

-2 -1 0 1 2 3

Final demand

Public

Investment

Housing

Consumption

ppts

yr to Sep 2010

yr to Sep 2011


-4

-2

0

2

4

6

8

-4

-2

0

2

4

6

8

1990/91 1994/95 1998/99 2002/03 2006/07 2010/11

% ann% ann

GSP State demand

Sources: ABS, SA Gov't, Westpac Economics

SA govtestimates and

forecasts

SA economic performance & official outlook


21/28


Chart 1. Chart 2.

Chart 3. Chart 4.

Chart 5. Chart 6.

21


... 2012 unlikely to see growth surge

Pipeline supportive of level, but not growth

0.0

0.5

1.0

1.5

2.0

2.5

3.0


Work done

Yet to be done

Approvals


0.0

0.5

1.0

1.5

2.0

2.5

3.0


Work done

Yet to be done

$bnInfrastructureSources: ABS, Westpac Economics

Exports boom, impetus fading

-30

-20

-10

0

10

20

30

40

-30

-20

-10

0

10

20

30

40


% ann% ann

SA Australia


* exports of goods, smoothed

0.0

0.5

1.0

1.5

2.0

2.5

0.0

0.5

1.0

1.5

2.0

2.5


% ann% ann

SA Australia


regional migration

schemes expanded

Population growth slowing but historically highSA jobs market has weakened considerably

-6

-4

-2

0

2

4

6

8

-15

-10

-5

0

5

10

15

20


% ann'000

Jobs, mth chg (lhs) Jobs 6mth chg, annls'd* (rhs)


* smoothed

Nil jobs growthover last 6mths.

Business investment has reached a plateau

0.0

0.4

0.8

1.2

1.6

0.0

0.4

0.8

1.2

1.6


$bn$bn

Equipment


Infrastructure


Private dwelling approvals weaken

7

9

11

13

15

17

19

0.3

0.5

0.7

0.9

1.1

1.3


'000'000

SA (lhs) Australia (rhs)



22/28

22



Tasmania: sluggish recovery ...

Unwinding fiscal stimulus

-15

-10

-5

0

5

10

15

20

25


Privatedemand

Publicdemand *

% ann

* smoothed

Demand

0.0

0.1

0.2

0.3

0.4

0.5

0.6


General government

Public corporations

$bn qtrSources: ABS, Westpac Economics

Public investment


1.0

-1.9

1.7

0.1

1.1

3.4

3.9

-0.9

0.2

0.4

-4 -2 0 2 4 6

Final demand

Public

Investment

Housing

Consumption

ppts

yr Sep 10

yr Sep 11


Business investment

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7


$bn$bn

Equipment *


Infrastructure


Basslink

* including computer software etc

The Tasmanian economy, which outperformed all other states(except WA) during 2008/09, has experienced a sluggishrecovery to date.

Gross State Product growth was just 0.4% for 2009/10 and0.8% for 2010/11, well below the decade average of 2.5%. Thestate government anticipates conditions will improve this year,forecasting growth to improve to 1.75%.

Following two quarters of decline, state demand advanced by1.1% in Q3 to be up 1.0% on a year-ago.

The unwinding of fiscal stimulus has been a major headwind.

Public demand fell by 6% over the last half year, slicing 1.8pptsoff total demand growth. The good news, this headwind is setto fade, with investment by the general government sectorapproaching the levels prevailing ahead of mid-2009.

While the public sector pulled back, the private sector gainedmomentum. Demand from the private sector increased by2.3% in the September quarter, to be up 4.1% over the year - aturnaround from a decline of 0.6% over the year prior.

Tasmanian households have been spending a little more freelyover the last year, with consumption increasing by 2.0%. Evenso, this is below the decade average of 3.0% annual growth.

Sub-par spending is not surprising given weak labour marketconditions. Wage incomes, in nominal terms, grew by just 2.4%over the last four quarters. Employment levels have weakenedsince Easter, declining by 0.8% over the eight months toNovember. The risk is that jobs growth remains soft in the near-term as firms are cautious given weakening conditions globally.

Lower interest rates, as well as prospects of a lower Australiandollar, will be welcome relief for the Tasmanian economy. Theboost from easier monetary conditions will, however, take

some time to be felt. Notably, private dwelling approvals fellaway sharply over the last half year, down by 25%.

The turnaround of private demand during 2011 was in large partdue to a business investment rebound. Equipment spending,which is lumpy, recovered by 40% over the last year, althoughit remains almost 20% below the peak of June 2008. However,with global growth slowing appreciably, the risk is thatequipment spending once again loses altitude.

On the non-residential construction front, the downturn ofcommercial building activity appears to be nearing a bottom,with the gap between work done and approvals all but closed.

Infrastructure work is off the lows of mid-2009. Even so,activity levels are almost 40% below those prevailing over thesecond half of 2008 - just as they are for commercial building.


23/28


Chart 1. Chart 2.

Chart 3. Chart 4.

Chart 5. Chart 6.

23


... rate relief welcome

-60

-40

-20

0

20

40

60

80

100

-60

-40

-20

0

20

40

60

80

100


% ann% ann


Approvals, adv 2 qtrs


Housing construction weakensDwelling approvals, down ahead of rate cuts

8

10

12

14

16

18

0.0

0.1

0.2

0.3

0.4


'000'000

Tas (lhs) Aust (rhs)


smoothed

-25%6mths to Oct


Employment remains below 2008 peak

2

4

6

8

10

12

14

180

190

200

210

220

230

240

250


'000 %

Employed, 3mth avg (lhs)

Unemployment rate, trend (rhs)


-0.5

0.0

0.5

1.0

1.5

2.0

2.5

-0.5

0.0

0.5

1.0

1.5

2.0

2.5


% ann% ann

Tasmania Australia


Population growth, moderated Non-residential construction

0.0

0.1

0.2

0.3

0.4


Work done

Yet to be done

Approvals *

$bn Non res. building

* 2qtr avg


0.0

0.3

0.6

0.9

1.2


Work done

Yet to be done

Commencements *

$bnInfrastructure

* 2qtr avg

-8

-4

0

4

8

12

16

-8

-4

0

4

8

12

16


% ann% ann

Tasmania Australia


Domestic demand


24/28

24

Chart 1. Chart 2.

Chart 3. Chart 4.



Summary indicators

7.3

5.6

4.6

2.3

1.7

0.5 0.40.2

0

1

2

3

4

5

6

7

8

NSW Vic Qld WA SA Tas ACT NT

mn


Australia: 22.6 million

Jun 2011

PopulationGross State Product

32

23

19

14

7

2

0 20 40

NSW

Vic

Qld

WA

SA

Tas

Shares

%

2010/11

60.4

56.8

58.7

93.6

54.7

48.7

40 60 80 100 120

$'000

GSP per capita

Aust: 62.2


0

10

20

30

40

NSW Vic Qld WA SA Tas NT ACT

$bn

Non construction

Construction


Business investment for 2010 Exports of goods & services

36

23

19

13

5

1

0 10 20 30 40

WA

NSW

Qld

Vic

SA

Tas

%

Share ofnational exports

2010/11

49

20

14

11

15

14

0 10 20 30 40 50 60

%

Share ofstate GSP

Aust = 19%


Industry mix

Australia NSW Vic Qld WA SA Tas NT ACT

Agriculture 2.8 2.0 3.0 3.5 1.4 6.2 8.3 3.9 0.1

Mining 8.5 3.0 2.9 8.8 31.2 4.7 1.5 20.2 0.1

Manufacturing 9.6 10.2 10.9 9.1 6.9 12.3 11.0 9.7 1.2

Construction 9.1 7.0 7.8 10.8 13.1 8.2 8.3 12.5 10.5

Transport, utilities 8.6 8.4 7.9 10.3 8.1 8.9 11.2 6.4 5.4

Wholesale, retail 10.1 9.9 11.2 11.9 7.5 10.4 10.5 5.4 5.3

Health, social assistance 6.6 6.5 7.0 7.1 4.7 7.9 9.6 6.7 5.9

Household services 10.9 11.7 12.3 10.3 6.6 11.4 13.2 9.7 15.8

Finance 11.4 16.0 13.5 8.1 5.0 10.3 8.4 4.8 4.5

Business services 16.7 19.8 19.5 13.8 12.4 13.2 9.9 9.9 17.4

Public administration 5.8 5.5 4.2 6.2 3.1 6.3 8.1 10.8 33.8

Sources: ABS, Westpac Economics. For the 2010/11 financial year. Share of gross value added, excluding ownership of dwellings.


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25


Notes


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26


Notes


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This issue was finalised on 21 December 2011

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Senior Economist

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Senior Economist

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Senior International Economist

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Senior Economist

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Economist

Auckland

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Dominick Stephens

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