ACT economy amongst the strongest

The ACT economy had weathered the Global Financial Crisis better than most, with ACT Treasurer, Katy Gallagher MLA, noting that economists had today named the Territory as one of the strongest performing in Australia.

“The latest economic indicators offer encouraging signs that the ACT is on the road to recovery and confirm that the ACT Government’s approach of supporting capital investment through the worst of the slowdown was the correct one,” Ms Gallagher said.

Today’s CommSec State of the States report names the ACT as the top ranking economy in Australia, alongside Western Australia, thanks to solid growth in the property market.

According to the report, the ACT is performing strongly in terms of economic growth, business investment, housing finance and dwelling starts, with capital expenditure more than 50 per cent above the long-term average.

Ms Gallagher said the report followed last week’s positive retail trade figures for November which showed the ACT recorded the second highest increase in turnover.

“Monthly retail turnover in the ACT increased by 2.7 per cent seasonally adjusted compared to a national increase of 1.4 per cent,” Ms Gallagher said.

“Despite several consecutive rises in the official interest rate, rates continue to remain relatively low, and together with high consumer confidence, this is now helping to support retail sales in the ACT.

“The rebound in seasonally adjusted retail trade growth combined with solid annual growth is very encouraging in an environment where there is no further fiscal stimulus to temporarily boost spending.

“The latest building approval figures also show the ACT is performing strongly, with approvals up almost 29 per cent year-on-year to November 2009 in original terms – the largest increase of all jurisdictions.

“However, there remains some uncertainty about the strength of future consumer spending with expectations that the Reserve Bank of Australia will continue to tighten monetary policy, so this is something I’ll continue to watch closely.

“There are also ongoing risks to the ACT’s outlook in the medium term as we expect the Commonwealth to moderate its spending in the future.”

11 January 2010