Australia entering two-speed economy

The Australian economic landscape is no longer driven by the states in the west or the mining boom but by new powerhouses in the east such as the New South Wales and Victoria owing to the rise in the services sector.

The quarterly CommSec State of the States report released on Monday confirmed that services powerhouse New South Wales is Australia's strongest state, followed by Victoria, while mining heavy states Queensland and Western Australia came in as Australia's worst performing, ranked six and seventh respectively. Western Australia was in equal last place with Tasmania.

CommSec chief economist Craig James said the latest report reinforces Australia's economic transition is underway from mining investment to other sources centered on consumer services as well as infrastructure and property construction.

"In two years, Western Australia has gone from first to seventh in the performance rankings," CommSec chief economist Craig James said in a statement on Monday as investment activity in resource-rich states is well down from the highs of the mining boom, suggesting an entering of a two-speed economy focusing on the eastern state," he said.

"NSW and Victoria are moving further ahead in the performance rankings as they benefit from strong retail spending and population growth."

The CommSec report analyzed eight key indicators which includes economic growth, retail spending, equipment investment, unemployment, construction, population growth, among others, which is then compared against decade averages. Enditem