South Australia’s defence and renewable energy credentials have the local economy well positioned to weather an uncertain global outlook, according to William Buck Chief Economist Besa Deda.
“We are optimistic about South Australia’s economic outlook,” Ms Deda said.
“The State has an opportunity to carve out future growth in advanced industries which are currently under the national and global spotlight.
“The local economy has emerged from the challenges of recent years in reasonably strong shape and has demonstrated relative resilience to external shocks. As we navigate ongoing geopolitical and global economic uncertainty, maintaining this resilience will be important.”
Ms Deda, in Adelaide this week to present at William Buck SA’s annual flagship event, said that while local business prospects heading into 2026 are encouraging, the State’s levels of private sector investment, housing affordability and net interstate migration outflows could hamper future growth.
Diversity delivers
“South Australia is a diverse economy, which holds it in good stead,” she said.
“There are innovative businesses excelling on the global stage wherever you look.
“The State is benefitting from strong public sector investment in key infrastructure alongside a rebound in consumer spending.
“With defence budgets globally on the rise and the Government’s commitment to net zero, SA is strategically positioned to leverage its advanced manufacturing capabilities, particularly in defence and renewable energy. This creates pipeline opportunities for sustained employment growth in high-skilled, high-wage industries.
“The agriculture sector outlook is mixed but improving, critical minerals are in the global spotlight and new international flight routes into Adelaide are a welcomed boost for inbound tourism.”
Clouds on the horizon
The fragmentation of globalisation and breakdown of traditional global trade arrangements poses risks for all economies around the world and SA is not immune, according to Ms Deda.
Ms Deda also pointed to domestic economic challenges.
“Private business investment remains sluggish and needs to pick up if the State is to improve productivity and output,” she said.
“Housing affordability was once a key drawcard for SA, but the State has now fallen to third-worst nationally, with only NSW and QLD less affordable.
“Population growth was the State’s Achilles’ heel for many years, though that improved during and after COVID. However, since 2023, SA has returned to net interstate migration outflows. While net overseas migration remains solid, losing people to other states may undermine the State’s economic growth potential.”
