Industry Outlook

This publication provides an overview of the Territory’s key industries and discusses opportunities and risks to growth in these industries.

The Northern Territory’s economic output is concentrated in the mining, and government and community services sectors. The main contributors to employment are the government and community services, retail and wholesale trade, and construction industries.

Table 1: Gross state product and employment, Territory 2021-221 (chain volume measure)
GSPEmployment
Value
$M
Change
%
10-year CAGR
%
Share of GSP
%
Number Change
%
10-year CAGR
%
Share
%
Government and community services 6 752 2.5 2.3 22.8 59 346 2.3 3.3 44.1
Public administration and safety 3 107 1.9 0.8 10.4 23 218 3.8 2.8 17.2
Health care and social assistance 2 261 4.1 5.9 7.7 24 561 6.5 5.9 18.2
Education and training 1 384 1.2 1.3 4.6 11 568 -8.1 0.1 8.6
Service industries 5 314 2.5 2.1 17.1 45 019 6.2 0.8 33.4
Accommodation and food services 568 -6.1 0.0 1.8 8 788 4.9 0.9 6.5
Transport, postal and warehousing 912 2.4 2.2 3.0 7 109 37.1 0.5 5.3
Information and media telecommunications 138 16.0 5.1 0.4 1 412 18.5 -1.3 1.0
Financial and insurance services 623 -0.5 1.7 2.0 943 -19.7 -7.2 0.7
Rental, hiring and real estate services 386 7.8 2.1 1.2 1 829 -6.2 -1.6 1.4
Professional, scientific and technical services 832 -1.2 1.5 2.8 7 268 -2.8 1.7 5.4
Administrative and support services 479 2.4 1.5 1.5 5 198 0.7 3.0 3.9
Electricity, gas, water and waste services 486 9.5 4.1 1.5 2 642 35.6 1.1 2.0
Arts and recreational services 364 9.6 5.0 1.1 3 137 -2.2 -1.0 2.3
Other services 526 5.4 2.4 1.6 6 692 -0.4 2.9 5
Mining and manufacturing 6 864 13.2 4.4 35.3 5 972 -7.8 -2.5 4.4
Mining 5 736 13.4 6.5 31.7 2 527 -17.7 - 5.3 1.9
Manufacturing 1 128 12.6 -2.3 3.6 3 445 1.1 0.2 2.6
Construction 1 547 4.2 -1.1 5.0 9 441 -9.6 -2.6 7.0
Defence2 2 674 8.7 2.9 11.1 5 395 -0.9 -2.1 5.14
Retail and wholesale trade 1 623 0.0 2.1 5.2 12 927 -1.8 -0.5 9.6
Retail 792 1.7 1.8 2.4 10 692 -6.4 -0.2 7.9
Wholesale trade 831 -1.5 2.4 2.7 2 235 28.3 -2.0 1.7
Tourism3 655 -24.4 -2.4 2.6 6 771 -9.5 -0.9 5.0
Agriculture, forestry and fishing 805 5.4 0.5 2.8 1 989 -17.7 -8.7 1.5

CAGR: compound annual growth rate; GSP: gross state product
1 Excludes non-industry components of GSP (ownership of dwellings, taxes less subsidies and statistical discrepancy). Numbers may not add due to rounding. Tourism and defence estimates are indicative. These sectors are not discrete industries in ABS reporting, and activity for these sectors is captured across multiple industries in ABS state accounts data. Therefore, figures in the table do not sum to ABS-reported GSP and employment data due to double counting related to the separate reporting of the tourism and defence sectors in this table.
2 ABS labour market statistics exclude defence personnel.
3 Data for 2020-21. State Tourism Satellite Account numbers produced by Tourism Research Australia are not available for 2021-22 at time of publication.
4 This is the Territory’s share of the Australian defence expenditure.
Source: ABS, State Accounts, Cat. No. 5220.0, Labour Force, Cat. No. 6291.0.55.003, unpublished defence data; Department of Defence annual reports; Tourism Research Australia, State Tourism Satellite Accounts; Department of Treasury and Finance

The Territory economy grew by 4.7% in 2021-22, and economic growth is forecast to average 0.9% per annum over the five years to 2026-27.

Gross state product (GSP) is expected to contract by 5.1% in 2022-23. This is weaker than the 3.7% forecast in the 2022-23 Budget, reflecting a 16.1% decrease in total exports following disruptions to liquefied natural gas (LNG) production and export volumes in the second half of 2022. There are several large-scale resource and technology projects proposed that are not included in the forecasts which, if they proceed during the outlook period, will contribute to growth.

Public consumption (2.2%), public investment (20%) and household consumption (0.4%) are expected to contribute to growth in 2022-23. Household consumption is estimated to grow modestly in the short term, due to the combination of higher interest rates, high inflation and lower consumer confidence.

While business confidence in the Territory remained strong over 2022 and early 2023, labour shortages have impacted most industries in the Territory over the past 18 months. Initiatives from the Territory and Commonwealth governments to upskill workers domestically and attract more overseas workers are expected to help reduce this shortage over time.

Global demand and prices for minerals have recovered since the beginning of the COVID-19 pandemic. Robust demand and prices for minerals will support the development of resource projects in the Territory over the outlook period. For example, demand for critical minerals is anticipated to be strong as countries increase efforts to transition to low-carbon energy, which has the potential to support critical mineral projects proceeding in the Territory. The risk of global supply chains being destabilised from geopolitical tensions, such as the Russia-Ukraine conflict, remains a source of uncertainty for demand and pricing of resources over the short term.

Locally, mining and energy activity will be heavily influenced by LNG production. Output is expected to decline in 2022-23 due to the depletion of the Bayu-Undan gas field and disruptions at Ichthys LNG in the second half of 2022. Output is likely to recover a little in 2023-24 with fewer disruptions at Ichthys, and increase again in 2025-26 once the Darwin LNG plant transitions to the Barossa field.

The government and community services sector’s output will continue to grow as the Territory’s population grows and as the Government provides targeted program funding for areas of strategic need. This includes funding for correctional services, health and public safety initiatives.

The Territory’s location makes it integral to the operational capability of the Australian Defence Force. The Territory is expected to benefit from increased defence spending over the outlook as the Commonwealth looks to maintain Australia’s strategic presence in the Indo-Pacific region. Much of the benefit of increased defence and infrastructure spending across different levels of government will be felt in the construction industry as facilities and capability are upgraded. The construction industry will also benefit from public investment in water, land and housing infrastructure by the Territory Government.

The retail trade industry is expected to slow in the short term due to high inflation and rising interest rates constraining household consumption. Growth over the outlook period will be primarily supported by population growth. Growth in the wholesale trade sector in the Territory is expected to improve in line with increased private investment activity over the outlook period.

The agriculture sector is expected to grow modestly over the outlook period. This reflects the expansion of agricultural land, increased cotton production and trialling of new horticultural products.