2023-24 State Accounts: performance, challenges, and what’s ahead

The 2023-24 State Accounts, released by the Australian Bureau of Statistics (ABS) today, reveal that economic growth accelerated in all states and territories during the 2023-24 financial year.

The Northern Territory (NT) recorded the fastest growth, with Gross State Product (GSP) lifting by 4.6% in 2023-24, compared to a 5.2% decline in 2022-23. This recovery was driven by a 9.5% surge in mining production, which had been disrupted by maintenance work and plant shutdowns in the previous financial year.

Another standout performer was the Australian Capital Territory (ACT), where GSP grew by 4.0% in 2023-24 following a strong increase of 4.7% in 2022-23. With a significant Federal Government presence, the ACT's economy is heavily influenced by public sector consumption, with growth underpinned by a lift in public sector employees. 

Queensland also performed well, recording a 2.1% increase in GSP in 2023-24 after a 2.8% rise the previous financial year. This growth was led by a 7.8% increase in the transport, postal, and warehousing sector, supported by the continued post-pandemic recovery in domestic and international air transport.

Australia’s most populous states, New South Wales (NSW) and Victoria, saw more moderate growth. Both benefited from a boost in output from the agricultural sector, fuelled by increased fruit, vegetable and livestock production. Victoria's GSP grew by 1.5% in 2023-24, following a 3.4% increase the previous year. New South Wales recorded a 1.2% increase in GSP, down from 4.2% in the previous year. 

Tasmania's GSP grew by 1.4% in 2023-24, following a 1.9% increase in 2022-23, while South Australia (SA) recorded a 1.2% rise, down from 3.6% in the previous year.

Chart 1: Gross State Product growth, 2023-24

Source: 2023-24 State Accounts

The slowest growing state in the last financial year was Western Australia (WA), an economy well known for being dominated by the resources sector. A 2.1% slump in mining production saw the state’s GSP grow by a modest 0.5% in 2023-24, following 3.7% growth in the previous year.

However, broader economic indicators paint a more positive picture of WA’s economic performance. WA has the second highest retail spending growth in the nation, increasing by 4.5% in the year to September 2024. It also booked solid employment growth of 2.8% in the year to October 2024. WA benefited from the fastest population growth among all states and territories, with its population increasing by 3.1% in the year to March 2024. 

Of note is the performance of WA’s housing sector. Across the country, dwelling investment activity is under the microscope as both government and the private sector try to find solutions to a chronic undersupply of homes. In contrast, WA has seen dwelling investment activity lift sharply over the past 12 months, while the pipeline of future work looks solid. 

Construction work done grew by a staggering 20.0% over the year to June 2024, while dwelling commencements were 26.2% higher across the same period. This growth has been supported by various government initiatives, including the Western Australian Government's $80 million Infrastructure Development Fund, aimed at resolving challenges in connecting essential services to new medium- and high-density housing projects more efficiently.

Table 1: Growth across economic indicators

Source: Australian Bureau of StatisticsNote: Retail spending is year to September 2024, employment growth is year to October 2024, population growth is year to March 2024, construction work and dwelling starts is year to June 2024.

Looking ahead, Deloitte Access Economics expects strong government spending to drive a rise in GSP for the ACT in the 2024-25 financial year, making it the most likely candidate for fastest-growing jurisdiction. Queensland is projected to see continued growth supported by rising household consumption and international exports.

Steady population growth and recovery in key sectors like agriculture and services is expected to support growth in Victoria and WA. SA is forecast to experience slower growth, as weaker exports outweigh an improving outlook for business investment. NSW is also expected to face challenges, primarily due to weak housing investment and consumer spending.

Finally, growth in the Northern Territory is expected to slow in 2024-25. However, major resource projects and strong retail spending are likely to support future expansion. Tasmania faces a decline in growth, reflecting weaker performance across key industries, slow population growth, and weak housing investment.

This newsletter was distributed on 20th November 2024. For any questions/comments on this week's newsletter, please contact our authors:

This blog was co-authored by Naasha Kermani, Senior Economist at Deloitte Access Economics

Click on the links below to read our previous Weekly Economic Briefings:

• US election - Implications for Australia (12 Nov)
• Reserve Bank holds cash rate steady amid uncertainty over underlying inflation (5 Nov)
• Headline inflation back in target but underlying price growth remains sticky (31 Oct)
• Deloitte Access Economics Business Outlook: Supply stumbles (23 Oct)