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

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Historically, the NT’s construction industry has been heavily influenced by resource-related projects. The strong economic expansion from 2011 to 2018, primarily driven by the Ichthys liquefied natural gas (LNG) project, prompted a surge in engineering construction that peaked at record levels in 2015. Residential and non-residential construction activity also experienced an increase in activity, albeit at lower levels of growth. Following the completion of the Ichthys LNG project, construction activity across all components has significantly declined.

Economic contribution

• The NT’s construction industry decreased by 46.6% in 2018-19 to $1.6 billion, contributing a 5.3 percentage point loss to the total 1.5% economic loss (Chart 1).
• The construction sector in the NT accounts for 6.3% of the total gross state product (GSP) in 2018-19, down from 11.4% in the previous year. This now represents the lowest share of GSP across all jurisdictions (Chart 2).
• In comparison, the value of the national construction industry decreased by 3.4% in 2018‑19, accounting for 7.5% of national gross domestic product (GDP) in the same year.

Contribution to employment

• In 2018-19 the NT construction industry contributed 8.4% or 11,158 people to the total resident workforce, which is the fourth largest employing industry in the NT (Chart 3).
• Employment declined by 23.1% in year-on-year terms, driven by a decrease in building and engineering activity.
• Nationally, the construction industry made up 9.1% of total national employment, accounting for 1,165,453 people over the same period.
• In the year to November 2019 employment fell 22.9% to 10,164 employed persons and now accounts for 7.8% of total NT employment, dropping to the fifth largest employing industry in the NT.

Engineering construction

Work done

• 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.
• In 2019, the value of engineering construction work done fell 66.0% to $1.3 billion, the lowest level since September 2011 and below the 10-year average of $4.7 billion (Chart 4).
• This was driven by a 71.7% decrease in private sector work (to $984 million), partly offset by a 6.1% increase in public sector activity (to $283 million).
• The decline in private sector work done was mainly driven by heavy industry (detracting 62.6 percentage points), which was likely related to the completion of the Ichthys LNG project.
• The main driver for the increase in public sector work done was roads, highways and subdivisions (contributing 22.2 percentage points), partly offset by a decline in bridges, railways and harbours (detracting 8.3 percentage points).

Work commenced

• In 2019, engineering work commenced fell 33.8% to $652 million, below the 10-year average of $1.4 billion.
• Private sector work commenced fell 52.4% to $341 million, below the 10-year average of $1.1 billion.
• Public sector work commenced increased 15.8% to $311 million, above the 10-year average of $269 million.
• 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.
• In 2019, the value of non‑residential building construction work done fell 27.0% to $441 million (Chart 5).
• Public sector work fell 31.7% to $247 million, below the 10-year average of $262.5 million.
• Private sector work fell 20.0% to $194 million, below the 10‑year average of $457.0 million, driven by lower levels of activity from previous years related to commercial and retail buildings.
• 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.

Non‑residential 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 both residential and non-residential buildings.
• In the year to April 2020, the value of approvals related to non-residential buildings fell 21.7% to $368 million, primarily driven by a 28.3% decline in public building approvals to $178 million (related to approvals for education and health facilities) (Chart 6).
• Private sector approvals also fell 14.4% to $189 million (related to offices), however remains below the 10-year average of $444 million.
• 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

• In 2019, the value of residential construction work done in the NT fell 23.1% to $325 million, the lowest value since September 2001 and below the 10‑year average of $622 million.
• This was driven by a 26.8% decrease in private sector construction activity to $214 million (below the 10‑year average of $475 million) and public sector activity declining by 15% to $110 million (below the 10-year average of $147 million).
• New house construction fell 20% to $170 million, below the 10-year average of $297 million. This was the largest component of residential construction. (Chart 7).
• Other residential construction (includes units and townhouses) fell 53.2% to $40 million, below the 10-year average of $200 million following the completion of a number of large developments, particularly in the Darwin CBD.
• Alterations and additions fell 8% to $115 million over the same period, below the 10-year average of $124 million.
• 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.

Residential building approvals

• In the year to April 2020, NT residential building approvals fell 19.6% to 553 approvals (Chart 8)
• The value of total NT residential building approvals fell 5.9% to $331 million, below the 10‑year average of $550 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 publications on their website.