Service industries
Outlook
The outlook for the Territory’s service industries is positive, supported by easing of labour supply constraints that had previously held back output, and a strong pipeline of construction projects that will support future growth.
The service sector covers a broad range of discrete industries (Chart 2), which accounted for 18.7% of the Territory’s GSP and 34.8% of the Territory’s employment in 2022-23.
Chart 2: Territory service industries gross value added, sub-industries
Source: ABS, Australian National Accounts: State Accounts, Cat. No. 5220.0; Department of Treasury and Finance
The output of the services sector grew strongly in 2022-23, up by 3.9%, having now fully recovered to pre-covid levels (Chart 3). Driving this growth was transport, postal and warehousing, up 17.8% in the year due to the return of international travel. Accommodation and food services also performed well in the year, up 5.2%, likely because of returning tourists following the end of covid-related travel restrictions.
There is some uncertainty in the outlook of industries with links to tourism, as travellers are starting to favour shorter trips closer to home given pressures on household budgets. Offsetting shifts in consumer behaviour is an easing in labour shortages, which had previously been a limiting factor for output. For more information on tourism, see the Tourism section.
Chart 3: Territory service industries gross value added
Source: ABS, Australian National Accounts: State Accounts, Cat No. 5220.0
The outlook for arts and recreation services is positive with the Northern Territory Art Gallery currently under construction in Darwin and the tendering process underway for the National Aboriginal Art Gallery in Alice Springs.
Professional, scientific and technical services will be supported by the construction of the Barossa project over the year ahead, following a resumption of activity in January 2024 after the project was delayed as a result of court proceedings. Other large construction projects that will support these services include the Darwin ship lift facility, Territory and Commonwealth joint investment into remote housing, and the National Aboriginal Art Gallery.
These services are also expected to benefit from defence infrastructure projects and increased expenditure on electricity and water infrastructure.
Additionally, there are a number of large construction projects proposed that, if final investment decisions are achieved, will boost and sustain service industries in the Territory in the future. For further information on these projects see Chapter 2 Economic Growth in the 2024-25 Northern Territory Economy book .
Large construction projects are expected to contribute to population growth with significant workforce demand. Population growth will support greater demand for a wide range of services across the Territory such as electricity, gas, water and waste services, and rental, hiring and real estate services.
Read Chapter 2, Economic growth, NT Economy book PDF (2.0 MB).
For the latest data on the services industries, refer to the Territory Economy website.