One of the big four banks has a positive outlook for the NSW economy and expects it to bolster Australia’s economy during its difficult transition from the mining boom.
ANZ said NSW will be “central” to the nation during the country’s transition to non-mining industries in the future, the SMH reports.
Despite sluggish growth over the past ten years in NSW, an ANZ report said it is now indicating “genuine recovery and is now outperforming the rest of Australia”.
“It’s now very much about NSW leading the national economy, which is something that hasn’t happened for a decade or more,” ANZ chief economist Warren Hogan said.
It also expects the NSW economy to grow as the economy in the United States picks up.
“NSW demonstrates closer correlation with the US economy than the rest of Australia and the US economy is recovering,” the report said.
“This is in contrast with our other major growth driver, China, which is slowing, albeit from higher growth rates.”
NSW has almost 45 per cent of Australia’s finance and insurance industry. A third of the nation’s economy is comprised in NSW.
Mining comprises only three per cent of the state’s economy and therefore it will not bear the brunt of falling commodity prices to the extent of Queensland and Western Australia.
The NSW government recently announced it is considering changes to regulations on mining proposals.
It said it wants to amend the current mine planning laws to boost certainty for investors and communities.
The changes would prioritise the economic benefits of mining projects in the approvals stage and lay standards for air quality, noise pollution.
The NSW Minerals Council recently said deferrals and delays of 12 months or more could risk 29,000 jobs and $10.3 billion in lost investments over 20 years.
Rio Tinto slashed 40 jobs at Mount Thorley Warkworth mine after a court prohibited the company from expanding the mine.
The company said it would review the viability of the mine after the court decision, with Coal & Allied managing director Darren Yeates blasting the NSW planning system.
The falling Australia dollar should help industries like tourism, manufacturing and education.
NSW added 83,000 jobs in the year to June, which is higher than the net gains of any other state.
Record low interest rates should help the housing sector in NSW, which is picking up after remaining low key for years. NSW will gain from the low interest rates unevenly because its mortgage debt is higher than other states.
The Reserve Bank slashes interest rates to 2.5 per cent on Tuesday.
NSW’s outlook differs from other mining states and Victoria, where the housing sector is still sluggish and will impact growth.