Construction

Outlook

Construction activity is expected to grow modestly over the outlook period, activity is already at a high level, supported by defence and resource-related projects.

In 2023-24, the construction sector grew by 3.8% to $2 billion, driven by increased non-dwelling construction work. The construction sector is the fourth largest industry in the Territory, accounting for 6.4% of total GSP and employing about 10,700 people.

A steady pipeline of projects is expected to support growth in construction activity over the outlook period, including the continuation of defence spending, and ongoing works as part of the Territory’s infrastructure program. There are also several potential private sector projects, that may reach final investment decision and increase construction activity over the outlook period (see Northern Territory Economy PDF (1.9 MB), chapter 2 economic growth box 1).

Chart 6: 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 deliver affordable housing through the HomeGrown Territory and FreshStart grants is expected to support residential construction activity in the Territory by stimulating new housing construction. Land releases across the Territory will also unlock opportunities for residential dwelling construction by expanding supply.

Engineering construction

The value of engineering construction work done increased by 7.8% in 2024 to $2.5 billion (Chart 7). In current prices, private sector activity increased by 7.8% to $1.8 billion, driven by work on bridges, railways and harbours, as repair work at GEMCO continues following Cyclone Megan, and heavy industry as work progressed on resource projects. Public sector activity increased by 20.8% to $829 million, largely reflecting work on roads, highways and subdivisions.

Value of Territory engineering construction work done by type¹

¹ Current prices
² Includes water storage and supply, sewerage and drainage, telecommunications and recreation, and other.

Source: ABS, Engineering Construction Activity, Australia

Significant investment into the Territory’s public infrastructure is expected over the outlook period. Construction work for the Darwin ship lift project is expected to ramp up in the near term, employing about 250 workers during the peak of construction, while progress is continuing on the Manton Dam return to service project with completion expected around mid-2026. In 2025-26, the Territory and Commonwealth governments are investing about $324 million in roads, including national highway and strategic road programs, and sealing and improving remote road access and crossing upgrades.

Defence-related projects will continue to contribute a significant amount of engineering construction work in the Territory, with about $5.96 billion in approved planned investments and a further $1.37 billion in unapproved planned investment (refer to Defence section for further information). Key works currently progressing include the Royal Australian Air Force (RAAF) Base Tindal redevelopment, major defence training ranges, and Robertson barracks base improvements.

Rehabilitation works are anticipated to support sustained activity over the outlook period, including at the Rum Jungle and Ranger uranium mines. Costs for the Ranger mine are anticipated to be $2.4 billion.

Private sector mining and gas-related projects are expected to contribute to engineering construction activity over the outlook period. The Tanami Expansion 2 project is expected to be completed in 2027, extending the lifetime of the Granites gold mine beyond 2040. Works at the Santos’ Barossa project and the life extension project of the Darwin LNG processing facility are progressing with first gas expected in the September quarter 2025. Further development of gas assets at the Beetaloo Sub-basin will also contribute to construction activity in the Territory (see Northern Territory Economy PDF (1.9 MB), chapter 2 economic growth box 1).

In January 2025, Arafura announced it received $200 million in equity funding from the National Reconstruction Fund Corporation. Arafura is targeting total equity funding of US$793 million and has already achieved its conditional debt financing goal of US$1 billion. In April 2025, Arafura announced the possibility of a joint venture which may reduce the equity funding required. It should be noted, this project has not yet reached final investment decision and is not included in budget forecasts (see Northern Territory Economy PDF (1.9 MB), chapter 2 economic growth box 1).

Over the long term, development of the Middle Arm Sustainable Development Precinct will aim to attract new industries, including carbon capture storage (see Northern Territory Economy PDF (1.9 MB), chapter 2 economic growth box 1), advanced manufacturing and minerals processing.

Non-residential construction

The value of non-residential building work done in the Territory increased by 3.9% to $903 million in 2024, with public sector activity increasing by 10.1% to $680 million and private sector activity declining by 11.2% to $223 million. In the next 2-3 years, public sector activity will continue to support non-residential construction activity with a significant amount of work in the pipeline (Chart 8).

Chart 8: Value of non-residential work yet to be done in the Territory, quarterly

Source: ABS, Building Activity, Australia

Upgrades are progressing across health infrastructure in the Territory, supporting non‑residential construction activity. The $86.3 million Royal Darwin Hospital mental health inpatient unit, stabilisation assessment, and referral area facility is on track to be completed in 2025-26.

Non-residential construction work in the regions will be supported through various funding agreements between the Commonwealth and Territory governments.

Construction of the Northern Territory Art Gallery at State Square, as part of the Darwin revitalisation project, is expected to support non-residential building activity over the medium term. In March 2025, the Development Consent Authority (DCA) approved the redevelopment of the Darwin Civic Centre, a $150 million building to be developed in a partnership between the City of Darwin and DCOH. The DCA has also approved the expansion of NextDC’s D1 data centre, which is expected to further support and attract digital investment in the Territory. Improvements at Casuarina shopping centre by Sentinel Property Group will also support non-residential building activity in the Territory, including plans to build a new three-storey carpark, reconfigure the Trower Road entrance and create new tenancies at the ground level, with a target for construction commencement in the second half of 2025.

Residential construction

The value of residential building work done in the Territory declined by 2.2% to $365 million in 2024, with private sector activity declining by 23.3% to $227 million and public sector activity increasing by 79.2% to $138 million.

Both demand and supply factors have contributed to the steady decline in residential construction activity in 2024. Increasing interest rates and input costs dampened demand for the construction of new builds, and net interstate migration flows remained weak in 2024.

However, demand is showing early signs of improvement in 2025 supported by building approvals data.  Household budgets are recovering following recent growth in real wages and easing inflation with further reductions in interest rates expected in 2025. The cost of construction is also stabilising, with these factors expected to support demand for housing. The Territory Government has introduced new homeownership assistance measures which will support residential activity in the Territory. These include the HomeGrown Territory grant, which offers $50,000 to first-home buyers for building or buying their first home and $10,000 to first‑home buyers to purchase an established dwelling, and the FreshStart New Home grant offers $30,000 to existing homeowners to build or buy a new home.

Several land releases, such as Kilgariff, Katherine East, Zuccoli, Humpty Doo, Lee Point, Northcrest and Holtze, are anticipated to support residential construction by providing a steady supply of land over the coming years.

Chart 9: Value of residential construction work in the pipeline, quarterly

Source: ABS, Building Activity, 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, with the goal of halving overcrowding. This is further supported by additional funding from the Commonwealth to continue to improve housing and infrastructure upgrades in remote homelands. In March 2025, the Commonwealth government announced $25 million for two projects in the Territory as part of the Housing Support Program. In Alice Springs, $14 million will go towards the construction of infrastructure and preparatory works to facilitate the development of up to 120 dwellings and in Palmerston, $11 million will provide upgrades to existing infrastructure in the Farrar West development.

For the latest data on the construction sector, refer to the Territory Economy website.