Vic gives NSW economy run for money

The NSW and Victorian economies continue to outpace the rest of the country while Western Australia has the post-mining boom blues.

Those are the findings of Commsec's latest quarterly State of the States report which saw NSW, the most populous state, post its seventh consecutive result as the country's strongest performing economy.

Victoria is edging ever closer in second place, having usurped NSW on housing finance.

Both states showed strong results in population growth, employment and retail spending.

"NSW continues to lead other states and territories in economic performance, but Victoria has gained substantial ground with strong housing finance and the fastest annual economic growth rate in the country," CommSec chief economist Craig James said.

CommSec ranks states' performance every three months on eight key measures.

The biggest change in the last quarter came in Western Australia's drop to sixth place from fifth, as the country's resources capital languishes in the aftermath of the mining boom.

WA posted the country's worst unemployment figures and was near-last on population growth, housing finance and equipment investment.

"The end of the construction phase of the mining boom is clearly evident in Western Australia and Queensland," Mr James said.

Queensland has struggled with slow economic growth and a lack of construction work but might see a boost to its tourism sector in coming months with the lower Aussie dollar, Mr James said.

The Northern Territory is also struggling, despite posting the nation's best economic growth and construction figures, as low population growth and housing threatens its momentum.

It ranked fourth behind the ACT which held on to third spot off strong investment in housing and equipment spending.

The Tasmanian economy improved on the back of the currency and has tied with South Australia for the wooden spoon.

While South Australia sits on the bottom of the rankings, momentum in its jobs market could lead to a lift in retail spending, Mr James said.

He said the outlook across the country remained relatively positive due to record low interest rates and good figures on employment, consumer spending and home building.

HOW THE STATES FARED

1 NSW - strong population growth, weak construction work

2 VIC - strong housing finance, weak equipment spending

3 ACT - strong equipment investment, weak construction work

4 NT - strong economic growth, weak population growth

5 QLD - strong dwelling starts, weak economic growth

6 WA - strong construction growth, weak job market

7 SA - strong population growth, weak retail spending

7 TAS - strong job market, weak economic growth