The ACT is leading the nation in three key economic areas, but its lacklustre performance in other metrics has held the territory back from taking the top economic spot, a new report has found.
The territory was the leader for economic growth in the first quarter of 2024, according to CommSec's quarterly State of the States economic performance report, released on Monday.
Real economic activity in the ACT, which measures the volume of goods and services produced, was 8.6 per cent above the long-term average.
Further economic growth is expected, with the ACT tipped to be the nation's fastest-growing economy this financial year, a recent Deloitte report found.
The ACT was also the leading state or territory for retail spending in the March quarter, according to the CommSec report, with spending up 10.8 per cent on the decade average.
Victoria was close behind, with spending up 10.3 per cent.
The other top-performing area for the ACT was equipment investment, which measures spending by private businesses on assets such as motor vehicles and IT equipment.
Spending in this area was up 47.2 per cent in the ACT, way ahead of the rest of the nation. Western Australia was second place, with spending up 29.5 per cent.
CommSec senior economist Ryan Felsman said the ACT's strong performance came at a time when many small businesses were struggling.
He said insolvencies in the ACT had increased about 60 per cent last financial year, compared to a national uplift of about 40 per cent.
"There are some smaller businesses in the territory under pressure at the moment, so that is a little bit of a source of weakness," he said.
"But overall, the economy is in good shape."
Solid private business investment was due in part to the ACT's robust public sector, Mr Felsman said.
ACT falls behind on jobs, population growth
Unemployment in the ACT was 9.5 per cent below its decade average, placing the territory in the bottom spot for the category.
But the change comes from a low base, with the ACT's jobless rate falling to 3.5 per cent, compared with the decade average of 3.9 per cent.
South Australia had the strongest job market, with unemployment falling 33.4 per cent to 3.9 per cent.
The ACT also fell behind other states on construction levels.
The value of residential, commercial and engineering work completed in the ACT was 4.7 per cent higher in the March quarter when compared with decade averages.
South Australia and Tasmania were the leading states, with construction work up more than 15 per cent.
Population growth was another area of weakness for the ACT, the report found.
Compared to the decade average, population in the territory grew by just under 2 per cent in the March quarter.
"We have seen a little bit of weakening when it comes to population growth and also net overseas migration," Mr Felsman said.
"So we have seen that being a little bit of a disadvantage for the territory which has got a high dependence particularly on international students."
Despite the weaker performance in these areas, the ACT was gaining momentum in terms of its annual metrics.
Focusing on annual growth rates, rather than decade averages, the ACT placed third amongst the states and territories for economic success.
