A strong jobs market and a thriving construction sector have established South Australia as the leading economy in the country for the third consecutive financial quarter.

According to a survey released today by CommSec, South Australia was ranked as the top-performing state, surpassing Western Australia and Victoria.

In its 'State of the States' report, CommSec, the online brokering division of the Commonwealth Bank, evaluated each state and territory quarterly using eight indicators: economic growth, retail spending, equipment investment, unemployment, construction activity, population growth, housing finance, and the number of new dwelling commencements.

Furthermore, while Western Australia showed strong momentum and was rapidly approaching the top spot due to relative population growth and home lending forecasts, South Australia still maintained an edge over other states and territories in areas such as completed building work, dwelling starts, and relative unemployment, according to CommSec senior economist Ryan Felsman.

“Across the country, the economic performance of Australia's states and territories is being supported by both strong employment and population growth, at a time of higher-than-desired price inflation,” he said.

Although the ACT held the fourth position, Queensland (fifth), Tasmania (sixth), and New South Wales (seventh) all fell in the rankings.

The Queensland economy benefits from a robust labour market, while New South Wales experiences solid population growth. However, retail spending in NSW is being constrained by higher borrowing costs, 9News reports.

In addition, Tasmania is experiencing the effects of a housing activity slowdown. According to CommSec, state economies have slowed down as consumers contend with higher borrowing costs and price pressures.

“The future economic path will be dependent on the resiliency of the job market and interest rates,” Felsman added.