The Australian economy is considered a mixed market economy, meaning it has both state and private-owned businesses. In 2015, this country had a gross domestic product (GDP) of $1.62 trillion, making it one of the leading economies in the world. GDP per capita ranges between $47,000 and $52,000. Its economy is largely driven by the mining and agricultural sectors.
Politically, Australia is divided into eight states. Each of these states has different economic success, some benefitting more from the mining and agricultural sectors than others. This article takes a closer look at the economies of the states of Australia.
8. Northern Territory
Northern Territory is located in Australia's central northern region. It covers a total area of 548,640 square miles and has a population of 244,000. This is the least populated state in the country and one of the poorest.
Mining is the principal economic activity here and provides jobs for over 4,600 people. This sector is focused on mineral and petroleum exploitation and production. The most important products are petroleum and natural gas which make up 33.4% of the mining sector, followed by metal ores and concentrates at 20%.
The mining sector in Northern Territory contributes around $2.5 billion to the state’s gross state product, which is about $23.648 billion. The gross state product (GSP) per capita averages $96,906 which is higher than the national average and the second highest in the country.
Tasmania is made up of one large island and 334 smaller islands located to the southeast of the Australian mainland. It has a total area of 26,410 square miles and a population of 518,500.
This island state has historically relied on mining, logging, and agriculture for its economic progress. Over the last decade or so, the economy has experienced some major changes. Now, the fishing industry plays an important role and Tasmania exports products like Atlantic salmon, crayfish, and abalone. This state has also shifted its agricultural focus and begun to produce wine, saffron, and cherries. Today, tourism one of the major contributors to the economy with increasing numbers of both international and Australian visitors.
The GSP of Tasmania is approximately $26.04 billion which represents a 1.3% increase over 2014/2015 numbers. The 2015/2016 GSP per capita is $50,327. Although this is a .9% increase over the previous year, it is still lower than the national average and lower than any other state in the country.
6. Australian Capital Territory
The Australian Capital Territory includes Canberra, the country’s capital. It is an enclave within the state of New South Wales in the southeastern region of Australia. This capital territory covers an area of 910 square miles and has a population of 395,200.
This state enjoys an unemployment rate that is lower than the national average. Its economy is based on public sector employment, which contributes to 29.8% of the gross territory product. Approximately 33.9% of residents here work in public administration. The gross territory product averages around $34.866 billion with per capita income reaching $89,975, the third highest in the country.
5. South Australia
South Australia is located in the south-central region of the country. It covers a total area of 402,903 and has a population of 1,706,500.
The largest employer in this state is the health care and social assistance sector, which provides jobs to over 103,000 people. Retail is the second largest employer with around 91,900 jobs. This is followed by manufacturing which employs 83,700 people. The manufacturing sector mainly consists of automotive, pharmaceuticals, defense technology, and electronic systems production. It is the main contributor of state exports and makes up roughly 11.7% of the GSP. South Australia has more exports than any other state in the country.
The GSP was $98.539 billion for 2014/2015. Per capita income levels are around $58,253, the second lowest in Australia.
4. Western Australia
Western Australia encompasses the entire west coast of Australia. It covers a total area of 1,021,478 square miles and has a population size of 2,613,700. This is the largest state by area and the fourth most populated.
The most important economic activity in Western Australia is mining of minerals and petroleum. Because of this natural resource extraction, its export sector is also a large contributor to the economy. The most commonly exported products include gold, crude oil, alumina, liquefied natural gas, iron ore, nickel, and wheat. Agricultural production generates $1.7 billion in export income for the state. All of the exports of Western Australia account for 46% of the nation’s total exports.
The 2014/2015 GSP here was $276.312 billion, placing it in the top 4 strongest state economies. This is so large, that if Western Australia were an independent nation, it would be within the top 50 economies of the world. The per capita GSP here averages $98,012, the highest in the country.
Queensland is located in the northeastern region of the country. It encompasses an area of 715,309 square miles and has a population of 4,827,000. Ten of the country’s 30 largest cities are located in this state.
The economy of Queensland is the third largest in Australia and makes up 19.5% of the national GDP. The most important sectors here are mining, agriculture, tourism, and financial services. This state has been increasing its export goods over the last decade and now exports over $49.4 billion worth of goods. These goods reflect the most important economic sectors and include coal, beef, aluminum, copper, copper ores, copper concentrates, fertilizers, and animal feed. The biggest employers here are the retail industry (11.7% of the workforce) and construction (11% of the workforce).
The 2014/2015 GSP was $300.270 billion. The GSP per capita, however, only reached $63,209, slightly above the national average.
Victoria is located in the furthest southern state on the east coast of Australia. It has an area of 91,753 square miles and a population of 6,039,100.
This state has the second largest economy in the country and produces around 25% of the national GDP. The biggest economic contributors to the economy of Victoria are financial services (30.5% of the GSP), social and personal services (16.6% of the GSP), manufacturing (15.4% of the GSP), and wholesale and retail trade (12.1% of the GSP). Of these sectors, social and personal services is the largest employer, providing 27.4% of the state’s jobs.
The 2014/2015 GSP of Victoria was $355.580 billion. The average GSP per capita reached $60,413.
1. New South Wales
New South Wales is located just north of Victoria. It covers an area of 312,528 square miles and has a population size of 7,704,300.
New South Wales has the largest economy in Australia and contributes 30.8% of the national GDP. This means that the economy of New South Wales is larger than the economy of some independent nations, including South Africa, Malaysia, Colombia, and Thailand. Its principal industries are services, mining, industrial and transportation equipment, and food processing. This state also has a large financial services sector.
For 2014/2015, New South Wales produced $506.918 billion in GSP. Its average GSP per capita reached $66,966.