In its recent report, ANZ argues that the NSW recovery will grow at an above average rate and play a central role in leading the national economy in its transition to stronger non-mining growth over the coming years. In recent months, the NSW economy has shown signs of genuine recovery and is currently outperforming the rest of Australia. This comes after a decade of underperformance, with its share of national output slipping 4 percentage points to 31% in 2012. Significantly, in the graph above, ANZ illustrates the correlation that exists between the US business cycle and the NSW economy. It concludes that a strong relationship exists due to linkages related to financial markets, financial services and the headquartering of multinational firms in Sydney. Importantly, ANZ's analysis suggests that although China is increasing its influence on the national economy, the US economy remains a major driver of the NSW cycle. (VIEW LINK)
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