Construction

For this industry, analysis is provided on the Northern Territory’s (NT) construction activity for residential and non-residential buildings, engineering construction activity, building approvals, as well as construction work yet to be done, detailing both private and public sector estimates.

Economic contribution | Contribution to employment | Engineering construction | Non‑residential construction | Residential construction | Explanatory notes

­Over the past seven years, the NT construction industry has been heavily influenced by works for the Ichthys liquefied natural gas (LNG) project, as well as other resource-related developments. During this period of strong economic expansion, the NT also realised a surge in residential construction activity, which peaked at historically high levels in 2013-14. Following the completion of the Ichthys LNG project, construction activity across all components has declined significantly.

Economic contribution

• The NT’s construction industry decreased by 15.7% in 2019-20 to $1.5 billion, detracting 1.1 percentage points to the total 5.3% economic growth (Chart 1).
• The construction sector in the NT accounts for 5.9% of the total gross state product (GSP) in 2019-20, down from 7.0% in the previous year. This represents second lowest share of GSP across all jurisdictions (Chart 2).
• In comparison, the value of the national construction industry decreased by 4.5% in 2019‑20, accounting for 7.2% of national gross domestic product (GDP) in the same year.

Contribution to employment

• In 2019-20, employment declined by 2.9%, driven by a decrease in building and engineering activity.
• The NT construction industry contributed 8.2% or 10,810 people to the total resident workforce in 2019‑20, which is the fourth largest employing industry in the NT (Chart 3).
• In the year to February 2021, employment fell 7.1% to 9,760 employed persons and now accounts for 7.5% of total NT employment.
• Nationally, the construction industry made up 9.2% of total national employment, accounting for 1,163,700 people over the same period.

Engineering construction

Engineering construction includes mining, oil and gas, and other heavy industry and utility‑related developments, as well as infrastructure including roads, highways, railways and bridges.

Work done

In 2020:

• the value of engineering construction work done fell 5.5% to $1.2 billion (below the 10‑year average of $4.9 billion) (Chart 4).
• the decline in engineering construction work done was driven by an 8.0% decrease in private sector activity to $957 million partly offset by a 5.0% increase in public sector work to $307 million.
• the main driver for the decline in private sector work done was heavy industry work (decreasing by 33% and detracting 20.7 percentage points), which likely follows the completion of the Ichthys LNG project.
• the increase in public sector work done was mainly driven by electricity generation, transmission and pipelines work (increasing by 242.9% and contributing 9.8 percentage points).

Work commenced

In 2020:

• engineering work commenced increased by 36.1% to $938 million (below the 10-year average of $1.2 billion).
• public sector work commenced decreased by 15.5% to $279 million (above the 10‑year average of $267 million), mainly due to a decrease of 73.8% in bridges, railways and harbours work and 26.9% in roads, highways and subdivisions.
• private sector work commenced increased 83.6% to $659 million (below the 10‑year average of $982 million), mainly due to an 115.8% increase in heavy industry work.

For the latest data and analysis on engineering construction activity in the NT, see the Department of Treasury and Finance’s Engineering construction activity economic brief.

Non‑residential construction

Non‑residential building includes hotels and other non‑residential accommodation facilities, shopping centres, factories, offices, warehouses, schools, medical centres, correctional facilities and other similar buildings.

Work done

In 2020:

• the value of non‑residential building construction work done increased by 12.6% to $490 million (Chart 5).
• public sector work fell 7.4% to $225 million (below the 10-year average of $254 million).
• private sector work rose 37.9% to $265 million (below the 10‑year average of $456 million), driven by commercial building work.

For the latest data and analysis on non-residential construction activity in the NT, see the Department of Treasury and Finance’s Building activity economic brief.

Building approvals

Building approvals can be used as a leading indicator to determine the trend of construction-related activity, which measures the number and value of building work approved for non-residential buildings.

In the year to February 2021:

• non-residential building approvals in the NT rose 136.7% to 903 approvals.
• the value of approvals related to non-residential buildings rose 136.7% to $903 million, driven by a 292.9% increase in public building approvals to $732 million, related to approvals for defence, border checkpoints and the Howard Springs quarantine facility (Chart 6).
• private sector approvals fell 12.3% to $171 million (below the 10-year average of $439 million) related to industrial work.

For the latest data and analysis on non-residential building approvals in the NT, see the Department of Treasury and Finance’s Building approvals economic brief.

Residential construction

Work done

In 2020:

• the value of residential construction work done in the NT rose 2.8% to $335 million (below the 10‑year average of $581 million).
• this was driven by a 6.6% increase in private sector activity to $230 million (below the 10-year average of $454 million) partly offset by a 4.6% decrease in public sector construction activity to $105 million (below the 10‑year average of $127 million).
• new house construction fell 4.3% to $163 million (below the 10-year average of $279 million), the largest component of residential construction (Chart 7).
• other residential construction (units, townhouses, etc.) rose 4.7% to $37 million (below the 10-year average of $182 million) following the completion of a number of large multi‑unit developments, particularly in the Darwin CBD.
• alterations and additions rose 15.8% to $135 million, growth was likely supported by the NT Government’s public housing stimulus programs, home improvement scheme under the Jobs Rescue and Recovery plan  and home renovation grants of up to $10 000 as part of the First Home Owner Discount incentive.

For the latest data and analysis on residential construction activity in the NT, see the Department of Treasury and Finance’s Building activity economic brief.

Building approvals

Building approvals can be used as a leading indicator to determine the trend of construction-related activity, which measures the number and value of building work approved for residential buildings.

In the year to February 2021:

• residential building approvals in the NT rose 39.0% to 741 approvals, the highest level since August 2018 (Chart 8).
• the increase in residential building approvals were driven by an increase in approvals for houses by 35.4% to 547, other residential (units, townhouses, etc.) by 43.6% to 168 and alterations, additions and conversions by 116.7% to 26.
• the value of total residential building approvals in the NT rose 7.1% to $354 million (below the 10‑year average of $524 million).

For the latest data and analysis on residential building approvals in the NT, see the Department of Treasury and Finance’s Building approvals economic brief.

Explanatory notes

• This analysis is based on the most recent Australian Bureau of Statistics (ABS) quarterly data on engineering construction and building activity, and the monthly data from the building approvals surveys.
• The ABS’s quarterly data on engineering construction and building activity is measured on a value of work done basis, compared to the GSP data. GSP data reflects the total gross value added to GSP by the industry, which includes wages paid to employees and value of construction work done. The engineering construction survey data excludes the cost of land, and repair and maintenance activities as well as the value of any transfers of existing assets.
• The ABS building activity survey is compiled using building approval details and returns collected from builders and other individuals and organisations engaged in building activity. The estimates represent all approved public and private sector residential building jobs valued at $10,000 or more and non-residential building jobs valued at $50,000 or more. The statistics relate to building activity so construction activity not defined as building such as the construction of roads, bridges, railways and earthworks are found in other ABS publications.
• The ABS’s building approvals survey is also used as a leading indicator to determine the trend of construction-related activity, which measures the number and value of building work approved for residential and non-residential buildings. This survey measures the number and value of building work approved for residential and non-residential buildings, including all approved residential buildings valued at $10,000 or more and all approved non-residential buildings valued at $50,000 or more.
• The Department of Infrastructure, Planning and Logistics (DIPL) also publishes a construction snapshot on a quarterly basis. The DIPL’s construction snapshot provides an overview of construction activity for major works over $500,000, reflecting both current and potential future construction-related work for NT regions. To view the latest construction snapshot, refer to DIPL’s industry section on their website.