Queensland ranked as top economic performer despite credit rating downgrade

Queensland has topped the nation in a new national economic performance ranking, but analysis shows it’s attracting just 3 per cent of booming investment in AI data centres across the country.

The sunshine state performed strongly in most areas during the June quarter in CommBank’s State of the States index, which ranks the eight states and territories across key metrics.

The result will likely be seized on by the LNP state administration when parliament sits on Tuesday morning, with the Crisafulli government reeling from a politically damaging credit rating downgrade on Friday which triggered widespread scrutiny of its financial management.

Investment in dwellings grew 16.8 per cent over the year in Queensland – the strongest result in the country – and business investment increased 9 per cent.

CommBank found household consumption was the only soft spot, slowing to 1.9 per cent a year from 3.3 per cent a year in the first quarter.

It comes days after the state credit rating was downgraded for the first time in 17 years by S&P as the state’s debt continues to spiral.

“Queensland’s been fairly consistent in terms of the last few years … it was number one in the quarter really due to consistency,” Commonwealth Bank economist Harry Ottley said.

He added the credit rating was unrelated to the bank’s ranking, which was assessing factors in the real economy rather than the state government’s fiscal position.

“There’s a fair bit of government spending going on [in Queensland] and so it’s kind of a separate conversation.”

Queensland was followed in the rankings by South Australia, Western Australia, NSW, the ACT, Victoria, Northern Territory and Tasmania.

CommBank estimated about $150 billion could be invested in data centres in Australia by 2030, with more than half concentrated in NSW (50.7 per cent) and almost a quarter in Victoria (22.8 per cent).

Just 3 per cent was expected to be invested in Queensland, with the proposed Zerra DC 1.44GW digital campus near Dalby highlighted at a project of particular significance.

“Certainly in terms of the data centre boom at the moment, that’s one area where Queensland is lagging a little bit,” Ottley said.

“There’s obviously other parts of business investment that are … holding up better.

“The data centre story is a comparative weakness, or there’s just not as much being announced in Queensland as the other states at this stage, but it’s a very fast-moving beast at the moment.”

The figure is a rough estimate based on project announcements compiled by CommBank.

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.

You have reached your maximum number of saved items.

Remove items from your saved list to add more.