Service industries
Outlook
The near‑term outlook for service industries is weakening as impacts of higher interest rates and the effects of the Middle East conflict impact discretionary spending, but will improve as the strong pipeline of construction projects supports employment, income growth and demand.
The service sector comprises a broad range of industries (Chart 3), which accounted for 21.5% of the Territory’s GSP and 30.3% of the Territory’s employment in 2024-25.
Chart 3: Territory gross value added by industry
Source: ABS, Australian National Accounts: State Accounts; Department of Treasury and Finance
The service sector grew by 3.6% to $7.2 billion in 2024-25 (Chart 4), with transport, postal and warehousing services the major contributor to growth (0.4 percentage points). Information, media and telecommunications, and electricity, gas and water also reported solid growth, reflecting strong demand related to large projects in the Territory including the $6 billion Barossa project. In contrast, administrative and support services and accommodation and food services, recorded declines.
Chart 4: Territory service sector gross value added and employment
LHS: left-hand side; RHS: right-hand side
Source: ABS, Australian National Accounts: State Accounts; Labour Force, Australia, Detailed
Rising oil prices are increasing costs across the services sector in the Territory, particularly in industries such as transport, where higher logistics expenses directly impact, as well as activity in the accommodation, retail and real estate industries. As costs rise, businesses may pass these increases on to consumers, contributing to reduced spending and weaker demand across hospitality and recreation, which are more sensitive to changes in discretionary spending.
Following the completion of the Barossa project, professional, scientific and technical services will be supported by other large-scale projects such as Territory and Commonwealth joint investment in remote housing, defence infrastructure upgrades and increased expenditure on electricity and water infrastructure.
Further growth in service industries is expected if several major proposed construction projects receive final approval. The establishment of the 246-hectare Northern Marine Complex on Darwin Harbour, recently declared as a Territory Development Area under newly exercised powers, will provide a coordinated maritime and industrial precinct incorporating the Darwin ship lift facility. This development will strengthen the Territory’s defence, commercial and marine services capabilities. These developments will contribute to population growth through increased employment, flowing through to demand for services such as electricity, gas, water and waste management, and property-related services. For further information on projects see Chapter 2 Economic Growth of the Northern Territory Economy PDF (5.5 MB).
For the latest data on service industries, refer to the Northern Territory Economy website.