Western Australia has again secured the top gong as Australia’s best performing economy according to a new report by the Commonwealth Bank, despite recording the country’s second weakest economic growth.

The mining state has led the national performance rankings for the fifth consecutive CommSec State of the States report, which identifies the country’s economic leader based on a number of financial indicators.

Strong household spending, population growth and housing finance have contributed to WA’s success, with Queensland moving into second place on the back of a boost in household spending.

But it was South Australia that topped the leader board for economic growth, with economic activity for the June 2025 quarter hitting 8.7 per cent — about the state’s long-term average.

Tasmania was the weakest performer on annual economic activity for the quarter, followed by Western Australia, where growth was up 3.62 per cent.

Sector volatility

WA Deputy Premier and Treasurer Rita Saffioti said the state was vulnerable to disruptions in the export sector, which had adversely impacted economic growth.

“For example, a cyclone event that closes the Pilbara port for a couple of days has some really big impacts on our numbers,” she said.

“We are very susceptible to volatility in some of our exports that throws those numbers.”

Rita Saffioti wears a suit jacket and glasses as she speaks to the media.

Rita Saffioti says WA is vulnerable to volatility in the export sector. (ABC News: Courtney Withers)

After trailing for more than a decade, WA topped the State of the States list in October 2024 and has now retained the position for 12 months.

Ms Saffioti said it was an achievement worth celebrating.

“WA in the past hasn’t done that well in the State of States report but to be able to hold that position of first for five quarters is something that hasn’t happened as I remember it, so we are very proud of that,” she said.

Housing in the spotlight

WA led the scoreboard in new housing builds, with project starts up 24.8 per cent above the decade average.

This was driven in part by population growth, with Ms Saffioti saying wage growth and low unemployment figures also fuelling the sector.

Two piles of bricks on a block in a suburban street.

WA led the scoreboard for new dwelling commencements. (ABC News: James Carmody)

WA Housing Minister John Carey said the results show the state government’s investment in housing was working.

“Everything is on the table when it comes to boosting housing supply and this report demonstrates again that WA is leading the nation,” he said.

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Australia’s overall economic performance is being driven by slowing inflation, reduced borrowing costs, rising real wages and a pick-up in housing investment, the report found.

SA was the third best performing jurisdiction in Australia, with strong domestic spending propelling the Northern Territory from eighth to fourth place.

Victoria ranked fifth, followed by Tasmania, New South Wales and the Australian Capital Territory

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