Political leaders cherry pick SA’s latest economic figures
So is the economy “forging ahead” as the state government claims, or is the Liberal party right in branding the latest figures a “warning sign”? The year’s economic data released this week for SA is under the microscope.
Key economic figures indicating the health of the state’s economy were released yesterday, with State Final Demand – a measure of economic activity – rising by 3 per cent in 2024-25, equalling Western Australia and outpacing national Domestic Final Demand at 2.1 per cent.
The state government seized on the figure claiming it showed the state’s economy was “forging ahead”.
In a state government press release, Treasurer Tom Koutsantonis hailed the figures as “the latest in a series of positive endorsements of South Australia’s economic direction, with a record number of South Australians in jobs in the previous month and the national Business Council of Australia again endorsing our state as the best place in the nation to do business”.
But then there was Gross State Product – a reflection of how the state is doing from an economic activity perspective – that increased by just 1 per cent.
This was driven by residential construction, with services industries including financial and health care services bolstering the growth.
The figures showed Australian Gross Domestic Product grew at 1.4 per cent for the same period, but other states were comparative standouts to South Australia, with the Australian Capital Territory and Queensland GSP growing at 3.5 per cent and 2.2 per cent, respectively.
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Western Australia and Victoria were also ahead of SA on these measures, with just New South Wales (0.9 per cent) growing less than SA.
Credit Union SA Chair of Economics at Uni SA Dr Susan Stone gave her own commentary.
“Gross State Product is a good reflection of how we are doing from an economic perspective. It does not measure things like quality of life, inequality or environmental sustainability. So it needs to be taken with a certain grain of salt,” she said.
“However, economic activity is a very important metric – it’s what drives the jobs we have to pay our bills and provides the goods and services we need to live our lives. From that perspective, it’s an important number to track.
“If economic activity declines, so will job prospects. A growing economy means more, and/or better, jobs, more services and, from a material standpoint, a better life.”
Stone said it was important to look at what was driving growth.
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“For SA it’s still residential construction (which is a good thing) and also finance and insurance services (which may not be so great if it’s due to claims from floods and other climate-driven events),” she said.
“Also, we saw big declines in agriculture, fish and forestry where the rest of the country grew, and manufacturing declined more in SA than nationally.
“However, Professional, Scientific and Technical outputs fell for Australia overall, but didn’t change much for SA. This reverses what we saw last year (2023-24), where output in that sector grew by 0.8 per cent for SA and 1.3 per cent for AUS.”
She added that it “makes sense” why the SFD figure was stronger, because it did not include the state’s net exports: “given the dismal performance of our agriculture, fish and forestry industry, which is a big exporter for SA, that would be a drag on total output”.
The State Liberal Party highlighted the Gross State Product per capita figure, which declined by 0.1 per cent, having fallen by 0.4 per cent the year before.
The state opposition also pointed toward gross household disposable income per capita of $54,000, below the national average of $62,000.
Shadow Treasurer Sam Telfer said the data was a significant concern for jobs and investment.
“The economy contracting per person should be a warning sign, and these results show clearly that South Australia needs a change of course,” Telfer said.
“This is happening whilst housing is becoming increasingly unaffordable, electricity prices are eye-wateringly high, homes and businesses are struggling to keep the lights on, and state debt is climbing.
“The South Australian economy has been sending warning signs for some time now and the Labor Government won’t even acknowledge the problem.”
