TASMANIA can't expect any economic improvement unless the high Australian dollar falls, an independent economic analysis has warned.
Deloitte Access Economics' latest quarterly report paints a bleak picture with the state's economic indicators "awash in a sea of red".
"To be clear, this state's economy isn't in crisis. But it isn't OK either," the report states.
"Unemployment is well above that in other states, and short-term prospects remain relatively modest (as well as hostage to the dollar's fortunes)."
Deloitte is predicting that the value of the Australian dollar will fall and loosen some of the constraints on the Tasmanian economy.
"But we need to be clear here: if the dollar stays at current levels, Tasmania is unlikely to stage even the modest recovery in these forecasts," the report states.
According to the December quarter data, consumer spending is no better than it was just before the global financial crisis once inflation is taken into account.
Deloitte's analysts also point to the lack of spending by businesses.
"They aren't building many new factories or much office space, and they're not buying much by way of new machinery or equipment either. And the slowdown is also evident in housing construction, which remains in reverse gear."
It notes that the dairy, aquaculture and tourism industry are providing some good news.
Liberal finance spokesman Peter Gutwein described the report as "another damning indictment" of the state minority government.
"The report also acknowledges what the Premier refuses to, that job prospects are so bad in Tasmania that people are packing their bags," Mr Gutwein said.
The report describes a vicious cycle whereby people leave chasing better prospects elsewhere, which further cuts demand and hinders the economy.