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 2018-19, the Territory economy declined by 1.5% to $26.1 billion.
• The Territory state final demand (SFD) declined by a record 16.2% to $24.6 billion, driven by decreases in both consumption and investment.
• Net exports increased by a record 117.9% to $5.9 billion in 2018-19.
• In 2019-20, SFD decreased by 4.5%, driven by decreases in consumption (down 0.2%) and investment (down 18.6%).

Economic growth

In 2018-19:

• the NT economy declined by 1.5% to $26.1 billion, down from 2.0% growth in 2017-18
• the NT recorded the lowest change of jurisdictions, while Tasmania recorded the highest growth, at 3.6% (Chart 2)
• the decline was driven by decreases in both investment (down 44.8%) and consumption (down 1.0%)
• net exports increased by a record 117.9% mostly reflecting a strong increase in goods exports (Chart 3)
• NT’s GSP per capita also decreased by 1.1% to $106,196, but despite the decline, the NT has the highest GSP per capita of the jurisdictions.

State final demand

In 2018-19:

• the NT’s SFD decreased by 16.2% to $24.6 billion, driven by decreases in both consumption and investment (Chart 4)
• Western Australia was the only other jurisdiction to record a year-on-year decline (down by 1.2%)
• national final demand increased by 1.5%
• 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 June quarter 2020, NT’s SFD:

• decreased by 4.9% (seasonally adjusted terms) to $5.6 billion in the quarter, compared to a decrease of 7.4% nationally
• was the second smallest decrease of the jurisdictions, which ranged from a 8.6% decrease in New South Wales to a 2.2% decrease in the Australian Capital Territory
• the NT’s SFD decreased by 4.5% in year-on-year terms (original terms) driven by declines in consumption and investment (Chart 4)

• recorded the lowest 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 2018-19, household consumption:

• declined by 1.1%, to $11.0 billion
• detractors included hotels, cafés and restaurants (detracting 0.29 percentage points from SFD) and recreation and culture (detracting 0.14 percentage points) (Chart 5)
• this was partly offset by miscellaneous goods and services (adding 0.08 percentage points) and health expenditure (adding 0.07 percentage points to SFD).

In the June quarter 2020, household consumption:

• decreased by 7.5% (seasonally adjusted terms) to $2.5 billion in the quarter, compared to a decrease of 12.1% nationally
• decrease in the quarter was driven by weaker expenditure on hotels, cafes and restaurants, transport, and recreation and culture.
• decreased by 3.3% (original terms) in year-on-year terms.

Public consumption

In 2018-19, public consumption:

• decreased by 0.8% to $8.0 billion
• decline was driven by state and local consumption down by 2.7% in the year, partly offset by a 2.2% increase in national consumption.

In the June quarter 2020, public consumption:

• decreased by 0.3% (seasonally adjusted terms) to $2.1 billion in the quarter, compared to an increase of 2.9% nationally
• increased by 3.9% (original terms) in year-on-year terms.

Private investment

In 2018-19, private investment:

• declined by 53.5% to $4.0 billion, largely due to a 58.2% decline in business investment, and investment in ownership transfer costs and dwellings also contributed to the decline in total private investment, down by 15.3% and 5.0%, respectively.
• recorded the largest decline in the time series.

In the June quarter 2020, private investment:

• decreased by 6.2% (seasonally adjusted terms) to $697 million in the quarter, compared to a decrease of 6.5% nationally
• decrease in the quarter was driven by business investment (down 12.2%)
• decreased by 20.4% (original terms) in year-on-year terms.

Business investment

In 2018-19, business investment:

• was the main contributor to the negative result for total investment, declining by 58.2% to $3.2 billion
• the main detractors were total non-dwelling construction (down 71.1%), cultivated biological resources (down 25.7%), and machinery and equipment (down 1.6%) (Chart 6).

In the June quarter 2020, business investment:

• decreased by 12.2% (seasonally adjusted terms) to $496 million in the quarter
• decrease in the quarter was driven by intellectual property products (down 13.3%), machinery and equipment investment (down 34.8%), partly offset by a 3.5% increase in non-dwelling construction and a 6.7% increase in cultivated biological resources
• decreased by 24.0% (original terms) in year-on-year terms.

Dwelling investment

In 2018-19, dwelling investment

• declined by 5.0% to $590 million, driven by a fall in new and used dwellings, partly offset by an increase in alterations and additions.
• 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 June quarter 2020, dwelling investment:

• increased by 20.4% (seasonally adjusted terms) to $171 million in the quarter, driven by a 34.4% increase in alterations and additions, partly offset by a 6.1% decrease in new and used dwellings.
• decreased by 6.1% (original terms) in year on year terms (Chart 7)

Ownership transfer costs

In 2018-19, ownership transfer costs:

• declined by 15.3% to $138 million.

In the June quarter 2020, ownership transfer costs:

• decreased by 13.9% (seasonally adjusted terms) to $31 million in the quarter
• increased by 0.7% (original terms) in year-on-year terms.

Public investment

In 2018-19, public investment:

• fell by 0.4% to $1.7 billion, driven by a 4.2% decrease in public corporations investment both Commonwealth, state and local related
• this was partly offset by a 0.5% increase across general government investment, driven by the state and local governments (up 3.1%)
• 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 June quarter 2020, public investment:

• decreased by 9.2% (seasonally adjusted terms) to $346 million in the quarter
• decreased by 14.7% (original terms) in year-on-year terms.

Net exports

In 2018-19, net exports:

• increased by 117.9% to $5.9 billion in 2018-19, reflecting a 33.2% increase in goods exports and a 29.8% decrease in goods imports
• net exports of services increased by $155 million to $148 million. This reflects a 0.8% increase in services exports to $733 million and a 20.3% decrease in services imports to $585 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 increased by 37.5% to $11.0 billion in the year to July 2020, driven by increasing exports to Japan. 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.