Construction
Outlook
Construction activity is projected to decline over 2025‑26 following completion of works for the Barossa project. Growth in activity in 2026‑27 is expected to be supported by increased investment in the Beetaloo Sub‑basin.
In 2024‑25, construction activity eased to around $2 billion. The construction sector is the fifth largest industry in the Territory, accounting for 6.2% of GSP and employing about 11,800 people.
Construction activity in the Territory has historically been supported by significant projects (Chart 7). A steady pipeline of projects is expected to support growth in construction activity over the outlook period, including continued defence spending and ongoing works as part of the Territory’s infrastructure investment program. There are also several large private sector projects that may reach final investment decision, adding to construction activity over the outlook period relative to the baseline forecast, which only includes projects that have reached final investment decision.
Chart 7: Construction work done in the Territory1
GEMCO: Groote Eylandt Mining Company; LNG: liquefied natural gas
1 Moving annual total.
Source: ABS, Construction Work Done, Australia; Department of Treasury and Finance
The Territory Government’s commitment to delivering affordable housing through the HomeGrown Territory and FreshStart grants is expected to support residential construction activity by stimulating new housing investment. Land releases across the Territory will also create opportunities for new residential developments.
Rising global oil prices related to the Middle East conflict are increasing operating costs of machinery, transporting materials and equipment. As fuel costs climb, the production and delivery of key materials such as concrete, steel and plastics also become more expensive. The impact is even more significant in remote regions of the Territory, where materials must be transported over long distances.
Engineering construction
In 2025, engineering construction work done increased to $5.6 billion. The value of engineering work done is largely driven by heavy industry as the Barossa project continued towards completion (Chart 8). The engineering construction work done declined by 24.4% to $526 million in the year‑ended December quarter 2025. The value of private sector activity declined by 22.8% to $437 million, driven by heavy industry and bridges, railways and harbours while public sector activity declined by 20.2% to $181 million over the same period.
Chart 8: Value of Territory engineering construction work done by type1
1 Current prices
Source: ABS, Engineering Construction Activity, Australia
Several significant infrastructure projects are supporting engineering and construction activity in the Territory. The construction of the Northern Marine Complex, including the Darwin ship lift project continues to progress supporting the growth of the Territory’s maritime industry. The Manton Dam return‑to‑service project is also well advanced, with construction nearly complete and commissioning on track for mid‑2026. Together, these projects are supporting construction activity, strengthening regional economic growth, and enhancing water security and maritime engineering capability.
Construction activity continues to progress on major defence‑related works, with several projects such as the Larrakeyah Defence Precinct Redevelopment and the RAAF (Royal Australian Air Force) Base Darwin mid‑term refresh moving closer to completion. As more projects approach completion, defence works are expected to ease in the near term. However, a large pipeline of defence construction activity will remain ongoing in the Territory with a number of new projects close to final approval (refer to the Defence chapter for further information).
Environmental rehabilitation at Rum Jungle and the Ranger uranium mine sites, including an estimated $2.4 billion in rehabilitation for Ranger, will continue to support activity.
Private sector mining and gas developments will continue to support the engineering construction pipeline. The Tanami expansion 2 project remains on track to be completed in 2027, extending the life of the mine beyond 2040.
Offshore gas investment expenditure related to the Barossa project will move into regular maintenance phase as construction is now complete and the plant is operating. While no new major offshore gas developments are currently anticipated, progress continues on CCS initiatives, particularly the Bonaparte CCS project led by INPEX, which aims to store carbon dioxide from the Ichthys LNG plant and other regional emitters. The project is presently undergoing environmental assessment. In parallel, INPEX has not yet made a final investment decision on a potential third LNG train, which could occur around 2030.
In the Beetaloo Sub‑basin, Beetaloo Energy’s final investment decision for the Carpentaria development in December 2025 enabled civil works, with initial gas sales expected in 2026. Santos has also announced a $300 million pilot drilling and testing program over the coming years in the Beetaloo Sub‑basin.
Further development of gas assets in the Beetaloo Sub‑basin combined with the long‑term ambitions for the Middle Arm Sustainable Development Precinct, as well as attracting low‑emission industries, CCS, advanced manufacturing and minerals processing are all expected to underpin future construction demand.
Non-residential construction
In the year‑ended December quarter 2025, non‑residential building work done in the Territory increased by 15.5% to $280 million, with private sector activity increasing by 17.6% to $70 million and public sector activity increasing by 14.8% to $209 million. Public sector work is expected to remain at high levels in the near term, with the value of non‑residential work yet to be done at $939.8 million in the December quarter 2025 (Chart 9).
Chart 9: Value of non‑residential work yet to be done in the Territory, quarterly
Source: ABS, Building Activity, Australia
In the Territory, the Darwin Correctional Centre remains the primary custodial facility, with additional capacity being delivered through a $192.2 million work camp in Darwin and a $41.8 million work camp in Katherine. The Katherine work camp is being developed at Charles Darwin University’s Katherine Rural Campus and will include a Corrections Skills and Training Facility incorporating vocational training, education and supervised work programs delivered using a combination of new and refurbished infrastructure.
In addition, $110 million has been allocated for the construction of the Palmerston Secondary Special Education School, a purpose built facility designed to support students with disabilities through specialised and inclusive learning environments. These investments contribute to the ongoing delivery of correctional, education and community infrastructure across the Territory.
Residential construction
Residential building work done in the Territory increased by 11.1% to $112 million in the year‑ended December quarter 2025, with private sector activity increasing by 28.4% to $83 million and public sector activity declining by 19.4% to $29 million.
Territory Government homeownership initiatives, including the HomeGrown Territory grant ($50,000 for first‑home builds) and the FreshStart new home grant ($30,000 for existing homeowners building or purchasing new homes), continue to stimulate demand. HomeGrown Territory grants are expected to contribute more than $180 million to the Territory’s economy and to support population and economic growth. The extension of the FreshStart New Home Grant and HomeGrown Territory Grant to 30 September 2027 provides increased policy certainty, supporting workforce stability and investment in the residential construction sector. Since introduction, these grants have boosted residential approvals and construction after a period of weakness following covid (Chart 10).
Land releases at Northcrest, Lee Point, Zuccoli, Asche, Holtze and the Heights, along with new developments, such as Farrar West (222 lots planned) and the Lloyd Creek Rural Village (4,200 lots), will continue to support future residential construction.
Chart 10: Territory building approvals by number of houses (moving annual total)
Source: ABS, Building Approvals, Australia; Department of Treasury and Finance
In March 2024, the Commonwealth and Territory governments announced a joint $4 billion investment for remote housing over 10 years, aiming to halve overcrowding. Since the commencement of the program, a total of 316 new homes were completed in remote locations, at December 2025. Of these, 175 were delivered by Aboriginal business enterprises. Additional support includes the Help to Buy scheme, (requiring deposits as low as 2%) and the $10 billion Housing Australia Future Fund targeting delivery of 40,000 social and affordable homes nationwide by 2029.
Further contributing to housing supply and CBD activation, land at 56 Woods Street has been allocated for a purpose‑built Charles Darwin University student accommodation facility expected to accommodate about 350 students adjacent to the Darwin city campus.
Interest rate increases in early 2026 will flow through to borrowing costs for developers and homebuyers, and impact demand and make securing finance more difficult. This is likely to delay or limit new residential developments and slow new of housing supply.
For the latest data on the construction sector, refer to the Northern Territory Economy website.