PROGRESS 2050: Toward a prosperous future for all Australians
22/08/2024
At a recent CEDA event in Adelaide, CEDA Senior Economist Melissa Wilson told trustees the South Australian economy was tracking reasonably well, despite a losing momentum in recent months.
South Australia was the top performer in CommSec’s latest July State of the States report, which ranks each state’s economic performance and how they’re progressing against their decade average.
“We came out number one for unemployment, for construction activity and for dwelling starts,” Ms Wilson said.
“It speaks to the strength of our labour market and our housing market at this point in time.
“It’s worth noting that we have lost a bit of momentum in recent months, we've seen spending by both households and businesses come down more recently.”
While South Australia was on the lower end for state-level demand nationally, its long-term average remained high.
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“When you look at that relative to our decade average, we come out as the second highest behind the ACT on the CommSec measure,” Ms Wilson said.
“Similarly, when you look at the unemployment rate, South Australia is there in the middle of the pack.”
South Australia’s unemployment rate was 4.3 per cent in the recent July figures, just above the national average of 4.2 per cent.
“Traditionally South Australia's unemployment rate is a bit higher than the national average, partly because we have a slightly older population, so this is quite a good outcome for us,” Ms Wilson said.
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While inflation is slowing nationally, Adelaide saw above average inflation growth in the June quarter.
“If you look at the inflation data in the capital cities, Adelaide is right up there with the second highest inflation number behind Perth,” Ms Wilson said.
“That partly reflects our very strong housing market, and you can see that coming through in dwelling prices, for example.”
Adelaide housing market growth has been the strongest in the country since the pandemic, Ms Wilson said.
“House prices are up 60 per cent over the past four years, which is similar to Brisbane and Perth,” she said.
“And at the same time our rental market is one of the tightest and our vacancy rate is around one per cent.”
Nationally, declining GDP per capita, declining real wages, housing affordability and increased tax bills are all contributing to challenges people are experiencing on an individual level, Ms Wilson said.
“The aggregate indicators are tracking fairly well when you look at unemployment, GDP and inflation, they’re heading in the right direction, but I think that masks some of the challenges at the individual level,” she said.