The Australian Capital Territory and Queensland have emerged as the nation's economic frontrunners, recording the strongest growth rates across Australia during the 2024-25 financial year according to fresh data from the Australian Bureau of Statistics.
State by State Economic Performance
The ABS annual gross state product figures reveal a tale of two economic speeds across Australia. The ACT economy expanded by a robust 3.5 percent, making it the fastest growing jurisdiction in the country. Queensland followed closely with impressive 2.2 percent growth, comfortably exceeding the national average of 1.4 percent.
These two territories stood alone in outperforming the national growth rate, with other states mostly recording growth around 1 percent. New South Wales managed only 0.9 percent growth despite having the largest economy, while Victoria grew by 1.1 percent. The ACT and Queensland, along with Tasmania, were also the only jurisdictions where economic growth exceeded population growth.
What's Driving the Divergence?
The contrasting performances reflect the different industry compositions across states. The national mining sector struggled with severe weather conditions and unplanned disruptions, which particularly affected Queensland, Western Australia and the Northern Territory.
Manufacturing weakness also restrained economic growth in several states. However, the ACT's service-based economy proved resilient, largely avoiding these challenges. The territory benefited from increased public sector activity, with public administration and safety surging by 7.2 percent.
Construction presented mixed results across the nation. In New South Wales, the near completion of major transport projects caused construction to detract from economic growth, though this was offset by a strong harvest that boosted agriculture. Western Australia saw housing construction provide an economic boost thanks to strong population growth, while residential construction remained weak in Tasmania.
Income and Population Variations
The data reveals fascinating contrasts in economic scale and productivity. The ACT, with a population of 484,000, generates a larger gross state product than Tasmania despite the Apple Isle having 576,000 residents.
Western Australia produces more per person due to its large mining industry, which generates substantial revenue while employing relatively few people. This pattern is also visible in real gross state income per person figures, which capture the impact of export and import price swings.
The mining focus creates more volatility in average incomes for Western Australia and the Northern Territory compared to other regions. Western Australia's recent prosperity from high mineral prices is partially redistributed to other states and territories through the Commonwealth Grants Commission process, mirroring historical support the state received when it was less prosperous during most of the 20th century.
Agricultural performance varied significantly across states. Favourable rural conditions meant agriculture made substantial contributions in NSW, Queensland, Western Australia, Tasmania and the Northern Territory. In stark contrast, drought conditions made agriculture a major detractor in South Australia's economy.
