Service industries

Outlook

The output of the Territory’s service industries is expected to increase in the short term with the reopening of interstate and international borders and the return of domestic and international tourists.

Following COVID-19 border closures in 2020 and 2021, the reopening of interstate and international borders is expected to lead to the gradual return of tourists over the outlook period, increasing demand for service industries with strong links to tourism such as accommodation and food, transport, and arts and recreation services.

The return of international tourism and international migration is also expected to boost labour supply for these industries, which have faced shortages over 2020-21 as result of closed borders. The tourism industry will be supported by a range of Territory government initiatives over the outlook period that are expected to help increase output for tourism-related service industries. For more information on these initiatives refer to the Tourism section.

Large construction projects are also expected to increase output in service industries over the outlook period. In particular, output for professional, scientific and technical services is expected to increase during the design and construction phase of large projects, such as:

  • Darwin ship lift project
  • Darwin Education and Community Precinct
  • National Aboriginal Art Gallery in Alice Springs
  • Civic and State Square Redevelopment, including the State Square Art Gallery in Darwin
  • Finniss lithium project
  • D1 (NEXTDC) data centre in Darwin
  • Lasseters Hotel Casino Redevelopment in Alice Springs.

These services are also expected to benefit from the Commonwealth 2022-23 Budget announcements to support low emission LNG and clean hydrogen production in Darwin, and development of the Middle Arm Sustainable Development Precinct and new logistics hubs in the regions.

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 refer to Chapter 2 Major projects and investment opportunities in the 2022‑23 Northern Territory Economy PDF (1.4 MB) publication.

Large construction projects are also expected to lead 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 real estate services.

Gross state product

Service industries generated 20.6% of the Territory’s GSP ($5.1 billion) in 2020-21, an increase of 2.1% from the prior year. The value generated by each respective service industry ranged from $119 million in information, media and telecommunications to $866 million in professional, scientific and technical services (Chart 1). Most service industries generated greater value in 2020-21 except for transport, postal and warehousing, and administrative and support services (which includes tour and travel bookings), which reduced by 6.1% ($52 million) and 7.4% ($34 million), respectively, due to lower international visitor numbers compared with 2019-20. The industries contributing the greatest to growth in GSP were professional, scientific and technical services, and accommodation and food services, contributing 0.2 and 0.18 percentage points, respectively.

Chart 1: Territory service industries share of gross state product

Territory service industries share of gross state product

Source: ABS, Australian National Accounts: State Accounts, Cat. No. 5220.0

Employment

Service industries were significantly impacted by COVID‑19 with employment decreasing by 2.4% in 2020‑21, however recovered in the second half of 2021, with employment growing by 6.4% (2,585) over 2021.

In the year to 2021, the service industries sector employed around 42,905 people across the Territory, accounting for 33% of the total employed (Chart 2). The high share of employment relative to GSP reflects the labour intensity of service industries. The largest employer within the service industries sector is accommodation and food services, employing around 8,515 people.

The greatest contributors to growth in service industries employment over 2021 were accommodation and food services, and administrative and support services, contributing 3.64 and 3.21 percentage points, respectively. This is likely a result of the casual work force in these industries returning to work as the Territory was relatively unaffected by COVID‑19 lockdowns and restrictions, and as interstate travel and tourism resumed. Professional, scientific and technical services, and information media and telecommunications were the largest detractors from employment, detracting 1.56 and 1.38 percentage points respectively.

The employment growth in each respective service industry was mixed over the year. Individual service industry employment growth ranged from a 31.1% (1,300) increase in administrative and support services to a 34.5% (525) decrease in information media and telecommunications. Other decreases were recorded in financial and insurance services (down by 31.1%), rental, hiring and real estate services (down by 20.5%), and professional, scientific and technical services (down by 8.4%), with the remaining service industries categories recording a yearly increase.

Chart 2: Territory service industries share of total employment

Territory service industries share of total employment

Source: ABS, Labour Force, Australia, Detailed, Cat. No. 6291.0.55.003

For the latest data on the services industries, refer to the Territory Economy website.