Construction activity is expected to grow over the outlook period, supported by significant defence and gas-related projects.

In 2020-21, the Territory’s construction sector had a modest increase of 0.4% to $1.5 billion, partly constrained by COVID-19 which brought about economic and health uncertainties, labour shortages and supply chain issues. The construction sector was the fifth largest industry in the Territory, accounting for 6% of total GSP and employing about 10,300 people.

A strong pipeline of projects throughout the forecast period is expected to support the Territory’s construction activity and help sustain recent growth in the sector post construction of the Ichthys LNG project (Chart 5), although a continuation of labour shortages and supply chain issues and the Russia‑Ukraine conflict are likely to be temporary constraining factors on its growth.

Chart 5: Construction work done in the Territory1

Construction work done in the Territory

GEMCO: Groote Eylandt Mining Company; LNG: liquefied natural gas
1  Moving annual total.
Source: ABS, Construction Work Done, Australia, Cat. No. 8755.0; Department of Treasury and Finance

In the near term, several major public projects are expected to commence, such as the Darwin ship lift and Mandorah marine facilities, which will add to the significant public works already underway in the areas of defence, education and recreation. The Territory Government’s commitment to deliver land to meet future growth demands will also unlock considerable construction activity, as will other ongoing works in the Territory’s $3.3 billion infrastructure program.

In the private sector, mining and gas‑related projects are expected to be the main drivers of construction activity. Works are continuing at the Finniss lithium project and the Granites mine expansion. Drilling of development wells is expected to commence in mid 2022 on the Barossa Project, with further works scheduled through to 2024. In addition to natural resources, investments in digital infrastructure are gaining traction in the Territory, with NEXTDC set to begin construction of its first data centre in late 2022 while also securing rights for a second centre.

Over the long term, the significant pipeline of works in the areas of defence, transportation and logistics, and public housing will continue to drive the Territory’s construction sector. As part of the 2022‑23 Budget, the Commonwealth has also committed $2.6 billion in infrastructure investment under its Energy Security and Regional Development plan. There are also prospective private sector investment projects, including those with major project status that, if realised, have the potential to provide significant growth to the Territory’s construction sector over the forecast period.

For an overview of committed and proposed major projects in the Territory, all of which will require varying degrees of construction work, refer to Chapter 2 Major projects and investment opportunities in the 2022‑23 Northern Territory Economy PDF (1.4 MB) publication.


The value of engineering construction work done increased by 33.9% in 2021 to $1.7 billion, with an increase in public sector activity by 82.7% to $595 million and in private sector activity by 21.7% to $1.2 billion. Construction activity has fallen from a peak of $9.4 billion in 2014‑15 but is up from 2019‑20. The peak was primarily associated with the Ichthys LNG project and the Northern Gas Pipeline which created significant heavy industry work in the Territory (Chart 6).

Engineering activity is expected to grow over the outlook period as large projects commence, particularly those in defence and the Darwin ship lift, investment in natural resources continues and work on road infrastructure supports construction across the Territory. Land developments across the Territory are also being brought forward to meet the current and growing market demand.

Chart 6: Value of Territory engineering construction work done by type1

Value of Territory engineering construction work done by type

1  Current prices.
Source: ABS, Building Activity, Australia, Cat. No. 8762.0; Department of Treasury and Finance

Defence’s largest body of works in the Territory will be its $1.1 billion RAAF Base Tindal upgrade, which is expected to continue through to 2027 and where a sizeable amount will be spent on runway extensions and new fuel storage facilities. Another $711 million in defence spending will provide infrastructure upgrades across Robertson Barracks, Kangaroo Flats, Mount Bundey and Bradshaw Field training areas. Other defence projects with significant engineering construction activity include the $520 million works at Larrakeyah Barracks and HMAS Coonawarra to improve services and provide new maritime facilities, and the $245 million works at Larrakeyah Defence Precinct to support the Arafura‑class offshore patrol vessels. The United States (US) Armed Forces also commenced construction of its $270 million bulk fuel storage facility at East Arm in early 2022, which will support US defence activities in the Territory and Indo‑Pacific region, with work on the facility expected to be complete by 2024. Refer to the Defence section for more information.

Defence operations will also be complemented by the Darwin ship lift, which is anticipated to commence in 2022 and be operational in 2024. When completed, the ship lift will be the largest in northern Australia, with capacity to service Australian Defence and Border Force vessels, as well as commercial and private vessels.

Construction of the ship lift and associated marine infrastructure will be partially financed by the Commonwealth’s Northern Australia Infrastructure Facility (NAIF) which has already approved and executed about $700 million in funding across 7 projects in the Territory. The largest of these are the Darwin ship lift and marine industry project, the Darwin Education and Community Precinct and Northern Territory Airports airport expansions. Other NAIF projects include the Humpty Doo Barramundi farm expansion, Voyages Indigenous Tourism Australia’s Connellan Airport upgrade, and the Hudson Creek power station and associated Batchelor solar farm. The NAIF initiative has been extended to 30 June 2026, providing further opportunity for investment in the Territory.

Several gas, oil and mining activities are currently underway in the Territory with further exploration activities having the potential to unlock significant construction activity over the outlook period. Works at the Finniss lithium project commenced in late 2021 with site establishment and road access works as well as fuel and water supply infrastructure, while the ongoing Granites mine expansion will see the construction of new infrastructure in the Tanami region with the aim to increase the mine’s life beyond 2040. The US$3.6 billion Barossa Project will provide gas to replace the existing Bayu‑Undan offshore gas supply, with a further US$600 million planned to extend the Darwin LNG plant’s life and pipeline tie-in project. This expansion project will increase construction activity in the Territory, contributing to economic growth and job creation.

Subject to exploration results and feasibility studies, unconventional gas extraction in the Beetaloo Sub‑basin has the potential to create demand for significant engineering services for essential infrastructure works over the outlook period. Exploration and development of the Beetaloo Sub-basin is being accelerated by the Commonwealth’s $226 million Beetaloo Strategic Basin Plan and infrastructure priority listing that will, among other things, develop enabling infrastructure in the region.

Road infrastructure works is a consistent contributor to the Territory’s engineering activity and is vital to connecting rural and remote communities in the Territory as well as supporting sectors like mining, pastoralism, agriculture and tourism. Large road related works on the Territory’s capital works program include the Roads of Strategic Importance initiative; Road Safety Program and Outback Way as well as upgrades to the Carpentaria Highway, Central Arnhem Road, Buntine Highway and roads on the Tiwi Islands.

Following the release of the independent Bringing Land to Market review, actions are being undertaken by the Territory Government to improve the land development process and ensure there is timely and efficient availability of land. Land development is being brought forward and will support considerable construction activity. Commercial land developments to be brought forward include the Weddell industrial and renewable energy hub, Parnttali Road subdivision extension in Tennant Creek and Brewer Estate in Alice Springs. Residential land developments include Holtze, Katherine East, Chittock Crescent stage 3 and Kilgariff north of Harris Avenue, and will complement developments currently occurring at Lee Point, Northcrest, Zuccoli and Kilgariff.

There are also several other large scale projects that, if realised, could provide a significant boost to engineering construction, including the Mount Peake project and Nolans rare earths project; Jervois base metal project; Ammaroo phosphate project; Sun Cable’s Australia-Asia Power Link project; Darwin Clean Fuels’ condensate processing facility; and HyperOne fibre network.


The value of non-residential building work done in the Territory decreased 3.3% in 2021 to $478 million, with public sector activity increasing by 29.1% to $295 million and private sector activity decreasing by 31.2% to $182 million. Public sector activity has been largely supported by defence works such as the Larrakeyah and Robertson Barracks redevelopment and the RAAF Base Tindal upgrade. The fall in private sector activity follows the cessation of several COVID-19 stimulus measures such as the business improvement scheme and Immediate Work Grants, as well as completion of large projects in 2020 such as Manunda Place and Darwin International Airport’s multipurpose training, freight and cold storage facility.

Non-residential building activity is expected to remain elevated for some time, with building approvals indicating a significant amount of work on the horizon for the Territory (Chart 7). Recent approvals are mainly related to the Darwin Education and Community Precinct and various defence projects.

Chart 7: Value of non-residential building approvals in the Territory1

Value of non-residential building approvals in the Territory

1  Moving annual total.
Source: ABS, Building Approvals, Australia, Cat. No. 8731.0

Construction on the $250 million Darwin Education and Community Precinct will continue through to 2024 and forms part of the broader $200 million Darwin City Deal project, which also includes the planned State Square Art Gallery currently under design.

Similar to engineering construction activity, defence work is expected to be a key driver of non‑residential construction activity in the Territory with funding earmarked over and beyond the forecast period. The Larrakeyah and Robertson barracks and RAAF Base Darwin redevelopment will see the construction of various facilities such as the NORFORCE headquarters, shared user and fuel storage assets, and training infrastructure.

Non-residential works are also being the carried out in the regions through various funding agreements between the Commonwealth and Territory governments as well as the private sector. The Commonwealth and Territory governments’ masterplan to redevelop Jabiru into a tourism and services centre has seen the completion of the Jabiru hybrid renewable energy power station in early 2022 as part of the Territory Government’s $135.5 million commitment. Combined with the Commonwealth’s $276 million commitment, further investment will include an Aboriginal-led World Heritage Kakadu Centre, tourism and services infrastructure and remediation works.

The Barkly Regional Deal, a 10-year commitment of $84.7 million by the Territory and Commonwealth governments and the Barkly Regional Council to improve the productivity and liveability of the region, has outlined among other works, a business, mining and energy services hub in Tennant Creek, youth infrastructure across the region and Alpurrurulam aerodrome upgrades. The mining and energy services hub is expected to support resource industry developments in the region and help develop Tennant Creek as a resource services hub and supply centre. The Territory Government has also committed to develop the Katherine Logistics and Agribusiness Hub, which will require significant construction work. This is being further complemented by the Commonwealth’s announced investment in logistics hubs including in Alice Springs, Katherine and Tennant Creek.

There are a number of digital investment projects in the Territory planned over the outlook period, some of which involve the construction of several data centres. NEXTDC is expected to commence construction on an $80 million data centre facility near the Darwin Education and Community Precinct in late 2022 and has secured land for a second centre. Similarly DCI Data Centres has also secured land in the Territory with plans to build a TIER-Ready III secure cloud data centre.


The value of residential building work done in the Territory increased by 2.8% to $345 million in 2021, with private sector activity increasing by 12.1% to $259 million and public sector activity decreasing by 17.7% to $86 million. The low interest rate environment, as well as various Territory and Commonwealth government home owner and home improvement incentives have supported residential activity over the past year. Following strong residential building activity in 2020‑21, growth is expected to moderate with rising input costs and labour shortages have been constraining factors.

Despite the expected moderation, there are several large residential construction projects expected to be completed including the $45 million John Stokes Square redevelopment that will contain 78 public housing dwellings spread across 3 residential towers and the $25 million Alice Springs hospital residential complex with 71 residential units. From 2021‑22, the upcoming titling of new residential land across various developments such as Lee Point, Mirawood, Parkside Berrimah, Northcrest, Zuccoli and Kilgariff will help stimulate residential construction activity, as may the development of Sunbuild’s 92 2‑bedroom Seabreeze apartments.

Looking forward, the pipeline of projects in the Territory, particularly around defence, mining and the marine industries will continue to support residential construction activity over the forecast period. The construction of these projects span multiple years and involve sizeable workforces, which will support demand for residential dwellings in the Territory. This is in addition to the residential development opportunities expected in the Darwin CBD once the Darwin Education and Community Precinct is complete, with Charles Darwin University currently seeking expressions of interest for the development of purpose built student accommodation to support an additional 250 to 300 students by 2025 and a further 120 by 2028. The demand for residential construction will be supported by the government’s work to improve the land development process and bring forward land development.

Residential construction activity across the Territory will also be supported by public housing, which includes a considerable proportion of dwellings in remote communities. Significant public housing activity is expected over the next several years under the Territory and Commonwealth governments’ Remote Housing Investment Package. Major works currently underway include over 80 new houses on Galiwin’ku, 150 new and improved homes across the Groote Archipelago and a mixture of duplex, quadruplex and multiple bedroom homes in Maningrida.

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