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Article on the front page of today's Advertiser.
More about the SA economy than TZN but the main picture features a truck driver from TZN.



CHRISTOPHER RUSSELL, MARK KENNY

September 03, 2009 12:01am

SOUTH Australia has soared ahead of the other states in economic growth, a key indicator published yesterday shows.

Household, business and government spending all defied the downturn and recorded strong growth in the past financial year, the Australian Bureau of Statistics found.

While other states were hit hard, SA has been opening new mines, such as the Angas zinc mine at Strathalbyn, and creating a robust economy, with 1.3 per cent growth in the quarter and 5.2 per cent over the year.

"This is actually a pretty good result," Prescott Securities chief economist Darryl Gobbett said.

The state result contributed to Australia recording national growth in gross domestic product of 0.6 per cent in the quarter – blowing away fears of a recession.

Federal Treasurer Wayne Swan called the GDP result "remarkable".

"Today's national accounts show that the Australian economy has been the best-performing advanced economy over the past year and the only advanced economy that has recorded positive growth over this period," he said.

State figures in the GDP data show a seasonally adjusted annual increase of 5.2 per cent in SA, compared with a 2.5 per cent increase in WA, 1.5 per cent in Victoria and 0.8 per cent in NSW. Queensland went backwards at negative 2.5 per cent.

The indicator measures what was spent by households, business and government, on both consumption and capital investment.

"SA has come through this downturn pretty well," Mr Gobbett said.

He noted the growth was widespread, with household and government spending "a bit stronger than we've seen nationally".

"The other thing is what's happening in the housing sector – construction is doing quite nicely. And business investment has held up."

Mr Gobbett said in the next two years the air warfare destroyer project, the expansion of Olympic Dam and potentially a good grain crop would lift SA further.

"We could well see good growth off what's proved to be a firm base, given all the problems there have been," he said.

In contrast with WA and Queensland – which slumped when the resources sector came under pressure – SA opened new mines last financial year, including the $1.2 billion Prominent Hill copper mine and Terramin Australia's Angas zinc mine. In its first year, Angas has injected more than $1.5 million into local business and exceeded production targets.

"Everyone down at the mine feels extremely proud of this effort," Angas general manager Andrew Robertson said.

The ABS said South Australians spent $19.5 billion in the quarter. Of this, $11.5 billion was spent by households on consumption and $3.5 billion by government.

When it came to capital investment, the private sector spent $3.8 billion and government $629 million.

Treasurer Kevin Foley was pleased by the good performance of key sectors, particularly business investment and household consumption.

"That demonstrates South Australians have greater confidence in the way the state is being managed and is headed in the future," he said.

"However, there are fluctuations in other sectors and while the overall picture is positive, the impact of the global financial crisis continues to provide areas for concern which I will continue to monitor closely."

Business SA chief executive officer Peter Vaughan said while challenges remain, the figures "point to a cautious recovery" and show the SA economy is resilient.