The Northern Territory (NT) has recorded a trade surplus for over a decade, mainly a result of the high volume and value of exports related to energy and mineral products (Chart 1). In 2018-19, the NT’s net international trade balance increased by 117.9% to $5.9 billion, up from $2.7 billion in 2017-18. This was above the 10-year average of $3.4 billion.
The 2018-19 increase in net exports was mainly driven by a 111.9% increase in net goods merchandise, with a 33.2% increase in goods exports and a 29.8% decline in goods imports. Net services increased by $155 million, driven by a 20.3% decline in service imports and a 0.8% increase in service exports.
The NT’s trade balance mainly consists of goods, with services only contributing a minor proportion of NT trade activity (2.5%). In 2018-19, service imports contributed 19.8% to the total value of imports and service exports contributed 8.3% to the total value of exports.
For the latest available data and analysis, see the Department of Treasury and Finance’s Gross State Product economic brief.
In 2018-19, the NT had the second highest level of exports as a share of GSP (39.4%) in current prices. This is consistent with the other mining states of Western Australia (60.0%) and Queensland (28.5%), which highlights the resource-intensive nature of the NT economy (Chart 2).
The NT’s top exported goods included confidential items (likely LNG and uranium), metalliferous ores and metal scrap, live animal exports (food and live animals), petroleum and petroleum related products, and meat and meat preparation (food and live animals) (Chart 3).
The NT’s value of exported goods increased by 64.7% to $9.4 billion in 2018-19, driven by increases in confidential items (up 98.2%). Confidential items (79.7%), and, metalliferous ores and metal scrap (10.8%) accounted for the majority of total exports over the year.
Data can be confidentialised by the source if a supplier’s privacy is easily identified; for example, the NT only has one exporter of Uranium. Recent changes in classification of confidential items have increased the proportion of confidentialised NT data.
In the year to October 2019, the NT’s total value of goods exported increased by 65.3% (up $4.2 billion) to $10.5 billion, in current prices. This was predominantly driven by significant increases in exports to Japan, Taiwan and China.
The top three goods export destinations were Japan (45.1%), China (24.0%) and Taiwan (8.8%). The combined goods exported to those destinations primarily consisted of confidential items (89.0%) and metalliferous ores and metal scrap (9.6%).
In the year to October 2019, exports to Japan increased by $2.5 billion to $4.8 billion, with the majority of the goods being confidential items (96.6%). Exports to China increased by $226 million to $2.5 billion in the year, with confidential items (70.8%), and metalliferous ores and metal scrap (27.0%) making up a large portion of the total. Exports to Taiwan also increased by $929 million to $931 million, with confidential items (99.7%) making up the majority of trade (Chart 4).
In 2018-19, the NT’s value of imported goods decreased by 6.7% to $1.8 billion.
The NT’s top three source countries for imports were Singapore, Switzerland and Malaysia, with growth in imports from Singapore (up $260 million to $665 million), and Switzerland (up $122 million to $250 million). However, imports from Malaysia declined by $88 million to $202 million, predominantly affected by a decline in petroleum and related products (down 29.4%).
Goods imported from these source markets mainly consisted of petroleum and related products (75.7%) and transport equipment (21.8%) (Chart 5).
In the year to October 2019, the NT’s imports decreased by 12.8% to $1.7 billion.
The NT’s top three source markets for imports were Singapore, Switzerland and Malaysia, with growth in imports from Switzerland (up $102 million to $255 million). However, imports from Singapore (down $128 million to $503 million), and Malaysia (down $75 million to $185 million) declined in year on year terms.
The main commodities imported from the source countries over this period include petroleum, petroleum products and related materials (70.1%) and transport equipment (26.8%).
For the latest available data and analysis on goods merchandise trade, see the Department of Treasury and Finance’s International trade economic brief.
In 2018-19 the international net trade balance for services increased to a surplus of $148 million. This was driven by a 20.3% decrease in international service imports and a 0.8% increase in international service exports (Chart 6).
The major components of the NT’s international service exports include personal travel services (62.5%) and government goods and services (17.5). The demand for international service exports are likely to be driven by the depreciation in the Australian dollar and global business confidence of investment in the NT. As a result of the NT’s small population size and high mining activity, NT service exports contributes a small portion (12.8%) to the NT’s total exports.
The major components of the NT’s international service imports include personal travel services (67.8%), freight services (11.7%), and passenger transport services (which includes agency fees and commission for air transport) (10.1%). The annual increase in service imports was a result of a 33.3% increase in freight services in 2017-18.International service imports are likely to be driven by an appreciation in the Australian dollar, making travel and overseas goods and services more affordable for domestic residents.
The latest International Monetary Fund (IMF) World Economic Outlook (WEO) October 2019 publication reports the global economy is in a synchronized slowdown, with growth forecasted at 3.0 per cent for the remainder of 2019 before rising back up to 3.4 per cent in 2020, a 0.2 percentage point decline from the April 2019 projections for both years.
This revision reflects increasing global tension and perceived weakness in global economies with factors such as:
Table 1 shows the GDP growth projections for some of the NT’s current major international trading destinations.
The Territory is geographically located close to major Asian economies including China, Japan, Malaysia, Indonesia and Thailand and, as expected, these are the Territory’s major trading partners. The Territory also relies on goods imports from the United States of America and the European Union, which are also identified as key trading partners.
The following analysis is based on the Territory’s key trading partners for exports and imports, which is updated on a biannual basis to reflect most recently available calendar year and financial year trade statistics. This reporting frequency is optimal given the relatively small size of the Territory economy, as well as volatility in the monthly international trade statistics published by the ABS.
National and interstate economic activity influences the NT’s economy through changes to population, interstate trade, domestic tourism and the availability of workers to meet the NT’s labour requirements. Additionally, monetary policy set by the RBA influences household consumption, business confidence and investment in the NT.
The RBA has kept the official cash rate at the record low of 0.75% in its most recent monetary policy meeting. The NT could benefit from relatively low interest rates due to the impact on business confidence, consumption and investment decisions.
In the year to October 2019, Australia’s national trade balance totaled $64.4 billion, a 345.0% increase in year on year terms. This was driven by an increase in trade of goods (up 238.0%) to $67.8 billion and a 43.2% increase in trade of services but still resulting to a deficit of $3.2 billion in the year.
The Australian Bureau of Statistics (ABS) publishes data on the NT’s trade balance annually. This is in line with the gross state product expenditure measure.
International Trade statistics are based on monthly data published by the ABS . This release provides preliminary estimates of Australia’s international goods and services on a balance of payments basis, and merchandise import and export statistics on an international merchandise trade basis.
International service exports represents income received by local businesses from overseas travelers, foreign businesses, foreign students and foreign government personnel (mostly defence), for services provided including meals, education, accommodation, entertainment and tourism activities. Service imports reflect expenditure by Territorians on services provided overseas. The ABS releases data for the NT’s services trade on a biannual basis, based on the most current financial year and calendar year results.
The IMF publishes a World Economic Outlook report biannually, which consists of an analyses by IMF staff economists on global economic developments during the near and medium term. An associated WEO database is released along with the WEO report, which presents the IMF staff’s analysis and forecasts of economic developments at the global level. The IMF also releases quarterly updates on global economic developments. These are not a full WEO report and do not include an update on the analysis and forecasts published in a full WEO report.
The World Bank releases data on commodity prices on a monthly basis.