Tasmania's economy has fallen into sixth place according to CommSec's quarterly State of the States report, published on Monday.
Four months ago Tasmania was sitting at the top, retaining it's spot as the best performing economy for the 12th time in the previous 15 quarters.
CommSec releases the report each quarter in an attempt to find out which state or territory is Australia's economic leader.
In terms of economic growth, Tasmania recorded the slowest growth and was down 0.7 per cent.
State Treasurer Michael Ferguson said while Tasmania was not on top this quarter, they had led the report for 12 of the past 15.
"Tasmania emerged from the pandemic stronger and faster than the rest of Australia, and it is clear that other states are now catching up," Mr Ferguson said.
He said the report noted that "there is little to separate the top six states and territories in terms of economic performance".
"Overall, of the eight CommSec indicators, Tasmania led on two, and was in the top three for another two."
Tasmania still lead on equipment investment, up by 21 per cent on the decade average, as well as dwelling starts, 4.8 per cent above the decade average.
Committed to businesses
Mr Ferguson said the government remained committed to working closely with businesses as they "confront national inflationary pressures".
"Like our small business reforms announced just last week," Mr Ferguson said.
He said ABS data confirmed more than 54,900 jobs were created for Tasmanians since the Liberal government came to power in 2014.
"The unemployment rate has maintained historically low levels for months, with a current recorded unemployment rate of 4.4 per cent, half of that under the disastrous former Labor-Green government," he said.
Tasmanian Labor Treasurer spokesperson Shane Broad said the report was "more bad news" for the economy.
"Which after 10 years of a Liberal government has also seen state final demand go backwards for three quarters in a row, with the highest unemployment rate in the nation," Dr Broad said.
"The CommSec report shows Tasmania was the only state to record a negative annual growth rate, which at -0.7 per cent is well behind the national average of 3.3 per cent.
"This is devastating news for Tasmanian households and businesses, but it's no coincidence that with a government in disarray, the economy is following suit."