Victoria in middle on leader board of state performances CommSec chief economist Craig James says Victoria continues to perform well on housing indicators. VICTORIA'S housing sector is among the nation's strongest, but the state continues to lag behind in construction and engineering, new research shows. A Commonwealth Bank study has found the states are falling into three distinct groups on the economic leader board, with the mining regions on top. Western Australia and the Northern Territory are "firmly fixed" as the nation's best performers, CommSec chief economist Craig James said. Victoria is in the middle bracket along with NSW, Queensland and the ACT. "Each of these economies has particular strengths but also areas where it could be performing better," Mr James said. Victoria continues to perform well on housing indicators - new finance commitments and dwelling starts. But commercial construction and engineering work are under-performing. Mr James said housing finance commitments were below the decade average in every state. However, Victoria recorded the strongest result with finance commitments in February, which were 3.1 per cent higher than a year ago, and just 1.6 per cent below the 10-year average. Research found the outlook for housing construction had improved around the country, underpinned by State Government grants and the nation's low interest rates. Victoria was the country's third-best performer in new homes starting to be built. Dwelling starts in the three months to December were 16 per cent higher than the 10-year average. While construction work was up in all states, Mr James said there was a large gap between the strongest and weakest performers. Victoria was the second weakest state, with construction work 19 per cent above the 10-year average. It contrasts sharply with the Northern Territory, which leads the nation with activity up 91 per cent. Mr James said joint action by federal and state governments would probably be needed to lift economic performance, especially in the weakest states of Tasmania and South Australia. "Without concerted action to boost economic activity, the risk is that a widening gap emerges between the strongest and weakest regions entrenching problems over the medium and longer term," he said.