Western Australia's economy slips from nation's strongest to weakest in two years: report

The economy of Western Australia (WA), a state which relies heavily on its mining industry, has slipped from Australia's strongest to its weakest in two years, an economic survey has found.

The annual State of the States ranking, completed by Australia's largest stockbroking firm Commonwealth Securities (CommSec), found that the fallout from the end of the mining boom is continuing to hurt WA's economy.

The survey ranks the economies of Australia's six states and two territories based on economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance and dwelling commencements.

WA's economy was hit hard as the price of iron ore, which the state mines 340 million tons of each year, crashed from over 180 US dollars per ton in 2011 to less than 50 US dollars per ton in early 2015.

Savanth Sebastian, a CommSec economist, said a rising unemployment figure well above the national average was the biggest factor in WA's ranking.

"Unemployment in WA is essentially about 40 percent above its decade average," he said on Monday.

However, Sebastian said that a resurgence in commodity prices over the last six months should provide hope that WA's economy will recover in the short-term.

"There was a lot of talk about the China bubble bursting last year and in fact it looks like if anything the Chinese economy is on a much more solid footing and that's certainly a very big positive for resource economies like WA," Sebastian told the Australian Broadcasting Corporation on Monday.

New South Wales retained its position as the country's strongest economy, followed by Victoria and the Australian Capital Territory. Endit