Large capitals lose economic momentum

The ANZ State-o-meter for September shows that both NSW and Vic have lost some momentum in their rate of economic growth in recent months.

After decelerating throughout the year, the index for NSW’s growth turned “slightly negative” in September, according to the bank.

“The loss of momentum reflects a broadly-based slowdown in the underlying indicators (i.e.: household sector, housing, business, labour and trade),” the bank said.

ANZ noted that the deterioration in NSW’s business sector was the main driver of the decline in September.

“The index will likely remain close to zero in October, with clear risk of deteriorating further,” it said.

Vic’s growth has also lost its momentum, although its growth is still holding above trend.

ANZ said: “A significant rise in the index remains unlikely unless the improvement in underlying indicators broadens beyond the labour market.”

Meanwhile, Qld’s growth index has stabilised over the past few months, and is predicted to be little changed in October.

According to the bank, SA is now growing “at trend”, with its “highest reading since January 2015”.  The NT has been following suit, with its index “steadily improving” since April.

WA’s index was largely unchanged in September, and remains at its lowest level since the GFC in 2009. Similarly, TAS’s economic growth fell to its lowest level since April, driven by weaknesses in its labour market.

Finally, growth in the ACT remains above trend, with economic activity having accelerated “sharply” over the previous months.

[Related: Smaller capitals to overtake Sydney and Melbourne]