The latest annual release of the state accounts on Friday shows Western Australia remains the strongest performing state. Robert F Kennedy famously said of gross national product that it “measures everything ... except that which makes life worthwhile”, the same might be said of gross state product (GSP). The breakdown of the figures shows strong economic growth does not always lead to things that are important in life – such as jobs.

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While Western Australia’s economy in the 2014-15 financial year grew by 3.5%, it was not the fastest growing state or territory. Northern Territory grew by a stunning 10.5%. So strongly did it grow it needs its own graph because the 10.5% screws up the scale for all other states:

The 10.5% growth is larger than any other state has achieved in the past 25 years – the best Western Australia has achieved in that period is 9.1% in 2011-12.

But a bit of context is required – Northern Territory is the smallest economy in Australia. It accounts for just 1.4% of Australia’s GDP. Western Australia by contrast is 10 times larger:

It means a big investment in a mine in Northern Territory has a huge impact. In the past year, the territory saw a $2.03bn increase in non-dwelling construction – a 24% increase in current dollars. For comparison, a similar increase in WA would see just a 4.6% increase on investment in that state.

But in the west it isn’t the increase in mining construction that is powering the state, but exports.

In the past year, exports of goods in WA contributed 4.26% to the growth of its economy, whereas the decline in private investment reduced the state’s economic growth by 2.3%:

In effect, in WA the growth of exports is overcoming the decline in investment. And it is producing a GSP growth still ahead of all the other states, if not as good as it was in the previous three years, nor in the years leading up to the GFC:

The transition from the mining boom is certainly evident in the GSP figures, with New South Wales and Victoria having stronger growth than they have seen since 2010-11.

On a per capita basis, Western Australia remains the strongest performer, and Tasmania is enjoying a period of growth it hasn’t seen since 2007-08.

On a per capita basis, as with the overall GSP growth figures, the worst performing state is Queensland.

The figures certainly don’t suggest members of the former Newman government, which was voted out earlier this year, have much to brag about. In per capita terms, Queensland’s economy shrunk by 0.85% in 2014-15 – the only state to go backwards.

Incidentally it is the only time in the past 25 years only one state has gone backwards – hardly a record worth setting.

The figures highlight that Queensland, despite often being called a mining state, is a rather different economy to WA. Whereas in the west, the exports of goods were able to more than compensate for the decline in private investment, in Queensland they didn’t come close.

The fall in private investment reduced the growth of the state’s economy by 4.8% but the exports of goods only added 0.8% to growth.

Queensland has also been a nice example of how austerity has not helped fill the gap of falling private investment:

Since 2012-13 at the same time that private sector investment was going backwards, state and local government capital spending has fallen.

It adds up to Queensland having a very poor growth of state final demand – indeed in 2014-15 demand in Queensland fell by 3%. That was the second worst performance across Australia, only WA’s fall of 3.5% was worse.

And it is here where we see how strong economic growth that comes via exports can hide the picture of the weakness of the actual state’s economy.

In the past, talk of the economy doing well via strong exports suggested either agriculture or manufacturing wherein such strength also implied strong employment.

If the economy is growing strongest off mining exports, employment likely grows slower than otherwise would be expected

When you hear of an Australian company exporting cars or various machinery you think of workers being employed to do so, but with the exporting of iron ore and other resources the main employment boom from building the mine and the various infrastructure supporting it has already occurred.

It means WA’s strong GSP growth has not translated to strong employment growth.

The real employment driver is state final demand – which takes in household consumption, dwelling construction (both of which were strong in NSW), private investmentand public consumption and investment.

It is not surprising the three states and territories with the strongest final demand growth are the three which have the strongest employment growth:

The state accounts highlight Australia’s changing economy. In the past, the link between economic growth and employment was quite close: strong economic growth invariably meant strong employment growth. But now there is somewhat of a disconnect between the two. If the economy is growing strongest off of mining exports, employment is likely to grow slower than otherwise would be expected.

And it’s why when we look at economic growth we need to focus not just on the overall number but what produces the overall growth. Because perhaps more so than in the past, GDP and GSP can be said to measure everything, except that which matters to people’s lives.