Industry outlook overview
The Northern Territory’s economic output is concentrated in the mining, defence, and public administration and safety industries (Table 1a and 1b).
The main contributors to employment are health care and social assistance, public administration and safety, and education and training, followed by retail trade, and accommodation and food services. This publication provides an overview of the Territory’s key industries and discusses opportunities and risks to growth in these industries.
Table 1a: Gross state product, Territory 2022-231 (chain volume measure)
| GSP | |||||
|---|---|---|---|---|---|
| Value $M | Change % | Share of GSP % | 10-year average | 10-year CAGR % | |
| Government and community services | 7 086 | 0.2 | 22.9 | 6 412 | 2.2 |
| Public administration and safety | 3 147 | - 2.4 | 10.1 | 3 033 | 0.7 |
| Health care and social assistance | 2 499 | 3.1 | 8.0 | 2 034 | 5.1 |
| Education and training | 1 440 | 1.1 | 4.8 | 1 346 | 1.6 |
| Service industries | 5 842 | 3.9 | 18.7 | 5 474 | 2.3 |
| Accommodation and food services | 685 | 5.2 | 2.3 | 654 | 0.8 |
| Transport, postal and warehousing | 1 196 | 17.8 | 3.6 | 1 070 | 4.0 |
| Information and media telecommunications | 134 | 6.3 | 0.4 | 107 | 5.6 |
| Financial and insurance services | 666 | 3.9 | 2.2 | 591 | 2.4 |
| Rental, hiring and real estate services | 448 | 1.1 | 1.4 | 405 | 2.5 |
| Professional, scientific and technical services | 855 | - 0.5 | 2.8 | 943 | 0.8 |
| Administrative and support services | 556 | 7.3 | 1.7 | 503 | 1.2 |
| Electricity, gas, water and waste services | 440 | - 4.8 | 1.5 | 414 | 3.3 |
| Arts and recreational services | 348 | - 6.5 | 1.1 | 310 | 3.2 |
| Other services | 514 | - 4.1 | 1.7 | 476 | 2.4 |
| Mining and manufacturing | 9 222 | - 15.6 | 31.6 | 8 512 | 2.7 |
| Mining | 8 183 | - 17.1 | 28.0 | 7 336 | 4.1 |
| Manufacturing | 1 039 | - 1.2 | 3.6 | 1 176 | - 4.2 |
| Construction | 1 768 | 6.6 | 5.7 | 2 315 | - 6.5 |
| Defence3 | 2 944 | 4.5 | 9.0 | 2 209 | 5.8 |
| Retail and wholesale trade | 1 630 | - 1.9 | 5.8 | 1 615 | 0.8 |
| Retail | 778 | - 2.8 | 2.7 | 778 | 0.4 |
| Wholesale trade | 852 | - 1.2 | 3.1 | 837 | 1.1 |
| Tourism3 | 1 226 | 56.7 | 3.8 | 1 003 | 2.9 |
| Agriculture, forestry and fishing | 767 | - 4.4 | 2.2 | 877 | - 0.3 |
Table 1b: Employment, Territory 2022-231
| Employment | ||||
|---|---|---|---|---|
| Number | Change % | Share of employment % | 10-year average | |
| Government and community services | 56 312 | - 1.9 | 41.3 | 52 787 |
| Public administration and safety | 19 428 | - 12.4 | 14.2 | 21 370 |
| Health care and social assistance | 22 172 | - 4.5 | 16.3 | 19 038 |
| Education and training | 14 712 | 22.3 | 10.8 | 12 379 |
| Service industries | 47 448 | 8.5 | 34.8 | 44 457 |
| Accommodation and food services | 10 498 | 13.6 | 7.7 | 9 226 |
| Transport, postal and warehousing | 5 945 | - 15.4 | 4.4 | 6 324 |
| Information and media telecommunications | 1 005 | - 24.8 | 0.7 | 1 335 |
| Financial and insurance services | 1 223 | 28.0 | 0.9 | 1 496 |
| Rental, hiring and real estate services | 1 919 | 11.9 | 1.4 | 2 076 |
| Professional, scientific and technical services | 8 329 | 25.4 | 6.1 | 7 161 |
| Administrative and support services | 4 864 | 6.9 | 3.6 | 4 414 |
| Electricity, gas, water and waste services | 2 580 | 4.0 | 1.9 | 2 330 |
| Arts and recreational services | 4 418 | 40.3 | 3.2 | 3 433 |
| Other services | 6 668 | 0.2 | 4.9 | 6 663 |
| Mining and manufacturing | 7 365 | 4.9 | 5.4 | 8 189 |
| Mining | 4 093 | 9.8 | 3.0 | 4 566 |
| Manufacturing | 3 272 | - 0.7 | 2.4 | 3 623 |
| Construction | 10 013 | 8.5 | 7.3 | 12 535 |
| Defence2 | 5 358 | - 0.7 | 5.04 | 5 548 |
| Retail and wholesale trade | 12 123 | 0.2 | 8.9 | 12 667 |
| Retail | 10 452 | 2.9 | 7.7 | 10 331 |
| Wholesale trade | 1 671 | - 13.7 | 1.2 | 2 336 |
| Tourism | 7 500 | 21.0 | 5.0 | 7 800 |
| Agriculture, forestry and fishing | 3 087 | - 10.7 | 2.3 | 2 613 |
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 Australian Bureau of Statistics (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 Current price terms.
4 This is the Territory’s share of the Australian Defence Force (ADF).
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
Territory economic activity declined by 5.3% in 2022-23 reflecting a pause in exports associated with major maintenance in the gas industry. Economic growth is forecast to average 4.1% per annum in the 5 years to 2027-28.
GSP is expected to increase by 4.9% in 2023-24. This reflects liquefied natural gas (LNG) exports from Ichthys LNG plant increasing relative to 2022-23, partially offset by a decline in lithium-related exports following the suspension of the Core Lithium mining production due to adverse commodity price movements.
Private investment
Private investment is forecast to grow by 5.8% in 2023-24, supported by a strong pipeline of major non-dwelling construction projects and investment related to preparing the Barossa project for production. There are several large-scale resource and technology projects proposed that are not included in the 2024-25 budget forecasts. If these projects achieved final investment decision status and began construction within the forward estimates period, this would create greater economic and employment activity.
Household consumption
Household consumption (-1.5%) is expected to detract from growth in 2023-24 due to the combination of high interest rates, recent increases in inflation and low consumer confidence. The impact of these factors is currently reflected in the slow growth of retail trade, and modest household spending in restaurants and cafés as rising costs of mortgage interest repayments and cost of living pressures impact household budgets. Household consumption is expected to improve from 2024-25 as tax cuts flow into household balance sheets, inflation pressures on non-discretionary consumption moderates and expected reductions in interest rates in 2025.
Dwelling investment
In the short term, dwelling investment is set to decline amid uncertainty around high interest rates, cost of living pressures on household budgets, and increased input costs weakening demand for the construction of new homes and apartments. Over the longer term, dwelling investment will be supported by decreased costs of borrowing, ample land supply and housing construction for the growing population, leading to positive downstream impacts for the service, retail and wholesale trade industries.
Public investment
Public investment (6.7%) is expected to contribute solidly to growth, underpinned by road infrastructure works, remote housing construction and defence projects. The growth of public consumption in the near term will be driven by spending to ease cost of living pressures, social services and address public safety.
Public investment in water, road, and infrastructure for housing development by the Territory Government, including large remote housing construction projects with the Commonwealth, and increased spending on public education, is expected to support the government and community services sector activity over the outlook.
Defence
As Australia’s northernmost jurisdiction, the Territory is integral to the operational capability of the ADF, and the Territory is expected to benefit from sustained levels of defence spending over the outlook period as the Commonwealth looks to grow Australia’s strategic presence in the Indo-Pacific region. Much of the benefit of defence and infrastructure spending across different levels of government will be felt in the construction industry as facilities and capability are upgraded.
Business confidence
Business confidence in the Territory remained positive throughout 2023 and remains above pre-pandemic levels. Most industries in the Territory were impacted by labour shortages and increasing business costs in 2022 and 2023, which to some extent has now eased. Initiatives from the Territory and Commonwealth governments to upskill more workers domestically and attract more overseas workers has assisted in reducing labour shortages, and this has eased pressures on some business input costs.
Agricultural sector
In 2022-23 the Territory’s agricultural sector experienced challenging conditions including a decline in cattle exports to Indonesia (the main importer of Territory live cattle) and Vietnam. In 2023-24, cattle prices have risen and cattle exports are returning to normal. An expansion of agricultural land and trialling of new crops in some regions, and investment in infrastructure and logistics hubs are expected to contribute to medium-term growth in the sector.
Mining
Global demand and prices for mining commodities exported by the Territory are expected to remain solid over the outlook period. Demand for critical minerals will improve in the medium term as a recovery in demand for energy-efficient technology eases recent price declines for some critical minerals across the forward estimates period (that is, lithium and spodumene concentrates) and as countries increase efforts to transition to low-carbon energy. The risks from geopolitical tensions spilling into global supply chains has risen. This reflects an escalation in hostilities related to both the Russia-Ukraine war and the Israel-Hamas war in the Middle East. Any escalation in these or other conflicts may add to gas price volatility.
Locally, mining activity will be heavily influenced by LNG production from the Darwin LNG plant. LNG production and exports are expected to increase, with the Barossa gas field set to replace production from the Bayu-Undan field as it approaches the end of operational life, and new development wells in the Amadeus Basin are likely to come online in the period ahead.