Economic Update

 

NSW: State Accounts – 2018-18

The NSW economy grew by 2.6% in 2017-18 down from 3.1% the previous year.  The NSW Government had forecast 3 per cent growth with some private sector forecasters expecting even higher growth.

NSW growth was sluggish compared to other states and territories.  NSW is now behind the ACT, Victoria, Queensland and Tasmania.

This has occurred within a broader context where NSW has been growing above trend and with other jurisdictions now clawing back some ground.  The strength of the NSW labour market reflects this with NSW having the lowest unemployment rate in the country. NSW’s exceptionalism in the labour market will normalise as other jurisdictions continue to catch up.

Construction, manufacturing and financial services were the star performers for NSW in 2017-18.  Weaker growth in professional services; primary industries; wholesale trade; transport, postal and warehousing; and real estate services contributed to the weaker result.

A strong rebound in investment supported growth, however NSW’s reliance on imports accounted for lower growth despite strong local demand.

Household consumption, construction and housing investment remained strong in 2017-18. 

The impact of a weaker property market will have a bigger impact on the 2018-19 growth figures.  The NSW Government’s $87bn infrastructure pipeline will also contribute to growth over the next four years.

Economic growth: NSW

Economic growth by state and territory

Contribution to growth by expenditure: NSW

Contribution to growth by industry value added: NSW

Contribution to growth by industry value added: NSW, 2017-18