Economic growth

This section will look at the changes that have occurred within the Northern Territory’s (NT) economy over recent years. The annual size and growth of the NT economy is measured by its gross state product (GSP). From the GSP, quarterly estimates and analysis is provided for state final demand (SFD). This includes the NT's consumption and investment spending  by people and households, businesses and Governments. GSP also tells us the value of NT goods and services exports and imports (net exports).

Key facts | Economic growth | State final demand | Household consumption | Public consumption | Private investment | Public investment | Net exports | Explanatory notes

Over the last 15 years the NT economy has experienced an ongoing pipeline of major project investments by both the public and private sectors, stimulating the expansion of the NT economy, exports and industries (Chart 1). The NT Government’s Economic Development Framework leverages existing strengths of the NT economy, unique culture and resources and our location as the gateway between Asia and Australia to continue the development and diversification of the NT economy, and encourage new investment and growth opportunities in the future.

Key facts

• In 2019-20, the Territory economy increased by 5.3% to $26.2 billion.
• The Territory state final demand (SFD) declined by 4.9% to $23.5 billion, driven by decreases in both consumption and investment.
• Net exports increased by 54.3% to $11.3 billion in 2019-20.
• In 2020, SFD decreased by 0.7%, driven by decreases in investment (down 8.2%)

Economic growth

In 2019-20:

• the NT economy increased by 5.3% to $26.2 billion, up from a decline of 1.3% in 2018-19
• the NT recorded the highest increase of the jurisdictions, while South Australia recorded the largest decline, at -1.4% (Chart 2)
• the increase was driven by  net exports (up 54.3%), with a 53.8% increase in net goods and a 79.8% increase in net services (Chart 3)
• consumption fell by 0.5%  and investment fell by 19.7%
• NT’s GSP per capita also increased by 5.7% to $106,851

State final demand

In 2019-20:

• the NT’s SFD decreased by 4.9% to $23.5 billion, driven by decreases in both consumption and investment (Chart 4)
• national final demand decreased by 1.1%

• SFD does not distinguish between demand met by goods and services produced within the NT, or by goods sourced from interstate or overseas, therefore SFD is not a full measure of the economy, nor can it be used as a proxy for GSP.

In the December quarter 2020, NT’s SFD:

• increased by 4.1% (seasonally adjusted terms) to $6.3 billion in the quarter, compared to an increase of 3.3% nationally
• was the second highest increase of the jurisdictions, which ranged from 0.6% in South Australia to a 6.8% increase in Victoria
• the NT’s SFD decreased by 0.7% in year-on-year terms (original terms) driven by declines in household consumption and investment (both public and private) (Chart 4)
• recorded the fourth best year-on-year result of the jurisdictions
• SFD does not distinguish between demand met by goods and services produced within the NT, or by goods sourced from interstate or overseas. Therefore, SFD is not a full measure of the economy, nor can it be used as a proxy for GSP.

Household consumption

In 2019-20, household consumption:

• declined by 3.6%, to $10.5 billion
• detractors included hotels, cafés and restaurants (detracting 0.71 percentage points from SFD) and transport (detracting 0.55 percentage points) (Chart 5)
• this was partly offset by furnishings and equipment (adding 0.08 percentage points) and communications (adding 0.04 percentage points to SFD).

In the December quarter 2020, household consumption:

• increased by 5.1% (seasonally adjusted terms) to $2.8 billion in the quarter, compared to an increase of 4.3% nationally
• increase in the quarter was driven by expenditure on hotels, cafes and restaurants, transport, recreation and culture, and other goods and services.
• decreased by 0.6% (original terms) in year-on-year terms.

Public consumption

In 2019-20, public consumption:

• increased by 3.7% to $8.5 billion
• the increase was driven by state and local consumption up by 1.0% and a 7.6% increase in national consumption.

In the December quarter 2020, public consumption:

• decreased by 0.3% (seasonally adjusted terms) to $2.2 billion in the quarter, compared to an increase of 0.8% nationally
• increased by 3.6% (original terms) in year-on-year terms.

Private investment

In 2019-20, private investment:

• declined by 20.2% to $3.2 billion, largely due to a 23.7% decline in business investment, and a 6.3% decline in dwelling investment
• ownership transfer costs increased by 0.7%

In the December quarter 2020, private investment:

• increased by 14.2% (seasonally adjusted terms) to $943 million in the quarter, compared to an increase of 3.9% nationally
• increase in the quarter was driven by business investment (up 18.5%)
• decreased by 4.6% (original terms) in year-on-year terms.

Business investment

In 2019-20, business investment:

• was the main contributor to the negative result for total investment, declining by 23.7% to $2.5 billion
• the main detractors were total non-dwelling construction (down 41.1%), cultivated biological resources (down 6.1%), and machinery and equipment (down 2.5%) (Chart 6).

In the December quarter 2020, business investment:

• increased by 18.5% (seasonally adjusted terms) to $718 million in the quarter
• increase in the quarter reflects increases across all categories with the main contributors to growth in non-dwelling construction (up 5.9%) and machinery and equipment investment (up 65.1%)
• decreased by 12.0% (original terms) in year-on-year terms.

Dwelling investment

In 2019-20, dwelling investment:

• declined by 6.3% to $565 million
• the increased dwelling supply over recent years and moderating population growth has also placed downward pressure on property prices and rents. For more information, refer to the Housing page.

In the December quarter 2020, dwelling investment:

• decreased by 3.4% to $170 million (seasonally adjusted terms) in the quarter, with a decrease of 6.7% in alterations and additions partly offset by a 1.8% increase in new and used dwellings
• increased by 27.9% (original terms) in year on year terms (Chart 7)

Ownership transfer costs

In 2019-20, ownership transfer costs:

• increased by 0.7% to $145 million.

In the December quarter 2020, ownership transfer costs:

• increased by 27.3% (seasonally adjusted terms) to $56 million in the quarter
• increased by 19.6% (original terms) in year-on-year terms.

Public investment

In 2019-20, public investment:

• fell by 18.5% to $1.4 billion, driven by a 25.4% decrease in public corporations investment both Commonwealth and state and local related, and a 17.1% decrease across general government investment, driven by the national and state and local governments
• The Australian Bureau of Statistics (ABS) statistical treatment of state and local public investment is not comparable to NT Government expenditure published in the Budget Papers, however provides a representation of public investment relative to GSP. For more information, refer to the NT Government's finance papers.

In the December quarter 2020, public investment:

• decreased by 0.6% (seasonally adjusted terms) to $314 million in the quarter
• decreased by 16.4% (original terms) in year-on-year terms.

Net exports

In 2019-20, net exports:

• increased by 54.3% to $11.3 billion, reflecting a 37.0% increase in goods exports and a 5.2% decrease in goods imports
• net exports of services increased by $99 million to $223 million. This reflects a 27.1% decrease in services imports to 461, partly offset by a 9.5% decrease in services exports to $684 million
• the latest monthly data published by the ABS within the ‘International Trade in Goods and Services’ release shows the NT’s total balance of goods traded decreased by 9.3% to $9.4 billion in the year to January 2021, driven by a decrease in the value of exports. Further information on the latest results for the NT’s goods trade balance can be found at the International trade page.

Explanatory notes

• GSP represents the value of economic output in a state or territory’s economy and is published annually on the ABS website.
• GSP is calculated using three measures: income, production and expenditure. Headline GSP represents an average of the combined income, expenditure and production measures.
• The ABS also publishes quarterly estimates of SFD, a measure of domestic economic activity. However, this does not include demand for the NT’s goods and services from overseas, net interstate trade or changes in inventories. Therefore, the annual value of net exports are provided through the GSP release, though with monthly estimates available in the separate ABS publication in ‘International Trade in Goods and Services’. For more information, refer to the International trade page.
• Caution should also be noted when comparing data currently pushed to previous publications. Historical GSP data is often revised from year to year as a result of new information available to the ABS. Given the relatively small size of the NT economy, this new information and subsequent revisions can have a significant impact on the NT’s growth rates.
• For the latest available data and analysis, see the Department of Treasury and Finance’s GSP and SFD economic briefs.