The ACT economy has again demonstrated solid economic growth with good results across most indicators for the first quarter of 2021. While all states and territories are showing positive results, the recovery is looking especially strong for the capital.
Bendigo Bank Head of Economic and Market Research David Robertson says the outlook for the Territory is particularly optimistic but says the vaccine rollout is critical, and the recovery may falter if there are delays.
“The worldwide trend is that countries with the fastest vaccination rate see the fastest economic recovery. Avoiding the need to lockdown is key; fortunately, that is something the ACT has largely escaped – so far,” Mr Robertson says.
Jobs nationally are back to pre-pandemic levels and the ACT has the lowest unemployment nationally at 4.1 per cent.
Mr Robertson says while that number is up from 2.7 per cent a year ago, the ACT has recaptured all the job losses from COVID-19. Underemployment in the ACT is 5 per cent, compared with 8.5 per cent nationally.
“This is good news at the end of JobKeeper because we are seeing a rise in job vacancies and job ads at records highs. Job mobility and market demand should offset the difficulties in some sectors.
“Job advertisements are up 23 per cent year-on-year in the ACT; however, this is still a particularly challenging environment for industries exposed to international travel like the hospitality and arts and entertainment sectors.”
Residential property nationally is also at record highs. The ACT recorded a property price increase of 2.8 per cent for March and will finish the quarter with an overall rise of 6 per cent.
Mr Robertson says the strength in the residential property prices is “good for spending and economic activity but obviously not so good for those trying to get into the market”.
“With help from low-interest rates, business and consumer confidence levels are at a record 10-year high, and the ACT property market is looking at gains of 10 per cent, year-on-year, if not more,” Mr Robertson says.
Population flows are showing strong demand for properties in smaller cities and the regions.
“People are definitely starting to move away from the big cities like Sydney and Melbourne based on the ABS data.”
Population growth is the stand-alone stagnation in economic data. Population growth is at 1 per cent year-on-year, but Mr Robertson says this is low across the country and will likely edge higher as borders reopen.
Mr Robertson observes the ACT budget delivered a timely increase in spending on infrastructure, transport, health and education that are all good for the economy.
“The ACT is the only state or territory to now have the same [credit rating] as Australia’s AAA sovereign rating. The ACT is in a strong fiscal position, and with a state final demand of around 4 to 5 per cent, things are looking promising.”
To find your local community bank branch, visit Bendigo Bank.
Original Article published by Karyn Starmer on The RiotACT.