Western Australia has been ranked as the best performing economy in Australia for the second consecutive quarter, according to the latest CommSec State of the States report. The report evaluates the economic performance of Australian states and territories based on eight key indicators compared to their decade averages.

Western Australia secured the top position by leading in five of the eight economic indicators: retail spending, unemployment, population growth, housing finance, and dwelling starts. This consistent performance has kept the state at the forefront of economic rankings.

Queensland has made significant strides, moving up to equal second place with South Australia. The state showed strong results across all indicators, reflecting its robust economic momentum. Queensland also leads in annual growth rates, indicating a strong upward trajectory.

Victoria remains in fourth place, maintaining its lead in construction work done. The state has shown notable improvement in annual growth rates, advancing from seventh to third place.

Tasmania is positioned in fifth place, ranking second in equipment spending but lagging in other areas. New South Wales has moved up to sixth place, with a fifth-place ranking on four indicators.

The Australian Capital Territory has slipped to seventh place, with a seventh-place ranking on four indicators. The Northern Territory remains in eighth place, though it has shown improvement in retail spending and equipment investment over the past year.

The CommSec State of the States report, published quarterly, utilises the most recent economic data available. It assesses economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance, and dwelling commencements. CommSec, the digital broking arm of Australia's largest bank, uses decade averages to evaluate economic performance.

Chief CommSec Economist Ryan Felsman said: "Overall, economies have slowed in response to higher interest rates and inflation, however Australian states and territories are proving resilient due to a strong job market and solid population growth. As consumers respond to higher borrowing costs and price pressures, the future path will depend on whether the job market can hold up as well as the trajectory of interest rates over the coming months."

"Western Australia’s performance across a number of indicators, namely retail spending, unemployment, population growth, housing finance and dwelling starts powered the state to the top of our economic leaderboard for the second quarter in a row. Queensland however is nipping at WA’s heels, having shot up to equal second place alongside South Australia, with solid results across the eight economic indicators and strong economic momentum. As expected, the interest-rate sensitive south-eastern states remained in a tight cluster mid-table," he said.