WA economy powering ahead: NAB

Western Australia's economy has continued to outperform the rest of the country and has pulled ahead of Queensland to be the best performing state, National Australia Bank has found.

The bank's March 2006 state outlook said WA and Queensland were benefiting from the resources boom, with high commodity prices and strong investment in resource projects and infrastructure.

In contrast, NSW and Victoria are expected to continue underperforming the rest of the country.

A review by HBOS Australia has confirmed these trends.

It found that WA overtook Queensland as the fast growing state last year, and that WA achieved real growth of 5.7 per cent in the second half of 2005.

The NAB report said WA's economic strength was reflected in double-digit growth in housing prices and the limited downturn in housing activity.

The mining boom is also contributing to double digit growth in business capital expenditure.

Not surprisingly, the bank's quarterly business survey found that businesses in WA are experiencing the strongest conditions and are more optimistic about their longer-term outlook.

The bank said increased employment and higher wages growth were leading to faster gains in household income in WA compared to other states.