The Victorian government will head to the November state election with the worst economic record of the major state governments, particularly on job creation, with the conservative governments of New South Wales and Queensland easily outperforming the Baillieu-Napthine government over recent years.

Using trend data to smooth out volatility, Victoria’s employment record under the Coalition since it replaced the Brumby Labor government has been noticeably inferior to the northern states, where conservative governments were elected in March 2011 in NSW, and March 2012 in Queensland. The unemployment rate in Victoria is now up 1.7 points from the 5% inherited from the Brumby government at the end of 2010. In the same period, Australia’s unemployment rate has gone from 5% to 6.2%. But in that period, Victoria’s participation rate has fallen by nearly a full point to 64.8%, while the national participation rate fell 0.6 points to 65%, so Victoria’s poorer unemployment performance comes despite a substantial fall in the proportion of Victorians looking for work.

In the same period, the participation rate fell in NSW by 0.4 points to 63.3% while unemployment rose 0.9 points; Queensland’s rate also fell one point, but unemployment is up only one point in that time, to 6.7%. Even South Australia has outperformed Victoria, with unemployment up 1.1 points to 6.7% despite participation only falling 0.7 points.Victoria has been particularly poor at creating full-time jobs, with Queensland actually outperforming the much larger Victoria since December 2010, and NSW generating more than twice as many full-time jobs.

A factor in Victoria’s poorer performance has been the strength of the Australian dollar since 2010, which has hit the state’s manufacturing base hard — Victoria is the only state where manufacturing continues to be by far the biggest employer, even compared to health care and social services, which is the largest national employer. But the state has failed to take advantage of the fall in the dollar since mid-2013, when it went below US dollar parity: more than two-thirds of the new jobs since the election of the Coalition were created before the dollar fell below US$1.00. In comparison, South Australia, where manufacturing also remains the largest employer (though barely ahead of health), has taken advantage of the fall in the dollar: two-thirds of the jobs created since December 2010 have been over the last 14 months, and in that time the state stopped losing full-time jobs.

Victoria’s economic woes have been felt in other areas as well. Construction and retail are, with health, the biggest employers of Victorians after manufacturing. But retail turnover this year in Victoria, in trend terms, is less than 9% up on the same period in 2011. In NSW, it’s up nearly 15%; in Queensland, 14%; nationally, it’s up 12.3%. Housing construction has also slowed — so far this year, fewer houses have been approved on average each month in Victoria than in the comparable period in 2011, and non-housing dwelling construction approvals are only up 2%. In comparison, in NSW, house approvals are up over 33% compared to 2011, and non-house dwellings nearly 60%. That reflects the extent to which the election of the O’Farrell government in NSW got housing moving in that state, but in Queensland house approvals are up 19%, and non-housing dwellings 43%. In South Australia, housing approvals are up 12%, and all dwelling construction is up 3%.

Victoria suffered a particularly weak 2013 in construction, with monthly house approvals down by a third on 2010-11 levels, but they’ve since recovered to almost return to the levels of the Brumby government. In fact, the economic slowdown in 2013 hit Victoria especially hard, with retail turnover marking time; in 2012-13, Victorian gross state output declined 0.2% while NSW grew 0.6% (both states had grown 1.2% in 2011-12 and Queensland grew 1.4%); even South Australia outperformed Victoria, with gross state product up 0.3%.

The problem for Denis Napthine as he faces a tough election is that not merely did 2013 hit Victoria hard, but the state has failed to begin producing jobs again despite the economy lifting again this year.