Outlook


The Northern Territory’s (NT) economic outlook explores a range of key economic indicators and industries, with forecasts produced for economic growth (gross state product and state final demand), population growth, employment growth, unemployment rate, prices (consumer price index) and wages (wage price index).

Gross state product | State final demand | Population | Employment growth | Unemployment rate | Consumer price index | Wage price index

The following is a summary of the NT's economic outlook, as published in the 2024-25 Budget.

Gross state product

  • The NT’s headline economic activity decreased by 5.3% in 2022-23 to a total GSP of $30.1 billion. This decrease was mainly driven by lower export volumes (down by 23.8%) in the year, which primarily reflects decreased production of liquefied natural gas due to maintenance activity at the Ichthys LNG plant in the second half of 2022 and lower production at the Darwin LNG plant.
  • The NT’s result was the weakest of the jurisdictions. Nationally, gross domestic product increased by 3.0%.
  • GSP is expected to return to growth in 2023-24, with a revised forecast of 4.9% in the 2024-25 Budget (Chart 1). This is 2 percentage points higher than the 2023-24 Mid-Year Report forecast of 2.9%.
  • Over the forward estimates, economic growth in the NT is likely to be heavily influenced by progress on the Barossa project and life extension work at the Darwin LNG plant. Business investment is expected to fall in 2025-26 following completion of the construction phase of the project. However, the impact on GSP should be offset by increased exports as the Barossa project moves into operation in the September quarter of 2025.
  • In March 2024, the occurrence of Cyclone Megan led to significant infrastructure damage at GEMCO mine, one of the largest mines in the NT. This resulted in the temporary suspension of operations at the mine, with exports expected to resume in the March quarter of 2025. The halt in production is expected to detract 0.7 percentage points from GSP growth in 2023-24 and 1.3 percentage points in 2024-25.
  • The projections made in the economic outlook do not factor in potential or planned projects that are yet to reach final investment decision. There are many projects on the NT’s horizon that could proceed in the forecast period but are not currently reflected in the outlook.

State final demand

  • State final demand (SFD) increased by 1.9% in 2022-23, driven by an increase in public investment (up by 12.3%) and an increase in public consumption (up by 1.4%).
  • SFD is forecast to grow by 1.7% in 2023-24, then 1.9% in 2024-25 (Chart 1), underpinned by growth in both private and public investment, and public consumption.
  • SFD growth in 2023-24 is partly offset by weaker household consumption as high inflation and higher interest rates increase the share of household budgets used for mortgage payments and reduce household disposable income.

Population

  • The NT’s population increased by 0.9% in 2022-23 to 252,529 people.
  • The NT’s population is expect to grow by 0.8% in 2023-24 (Chart 2), with ongoing weakness in natural increase as economic uncertainty and cost of living pressures weigh on family budgets. Net interstate migration is also expected to remain weak, and net overseas migration is expected to soften as arrivals moderate in line with Commonwealth policy decisions.
  • Migration flows are expected to normalise over the forward estimates period, with interstate arrivals returning to average historical trends, while overseas arrivals slow from current elevated levels. Annual population growth is expected to stabilise at 1.1% per annum from 2025-26 to 2027-28.

Employment

  • Resident employment in the NT increased by 1.5% in 2022-23.
  • NT employment is expected to increase by 1.5% in 2023-24, before declining to 0.9% in 2025-26 as construction at the Barossa project is completed (Chart 3).
  • In March 2024, improvements were made to the labour force estimates, with significant changes applied to the labour force statistics dating back to August 2016. As a result, the labour market forecasts published in the 2024-25 Budget are not comparable with forecasts in previous publications.

Unemployment rate

  • The NT’s unemployment rate averaged 4.3% in 2022-23.
  • The unemployment rate is estimated to increase from 4.4% in 2023-24 to 4.8% in 2025-26, before decline over the rest of the forward estimates period (Chart 4). This broadly reflects impact of the Territory major investment profile.

Consumer price index

  • Inflation in Darwin fell to 3.3% in the March quarter 2024 from its peak of 7.1% in the December quarter 2022. In year-on-year terms, growth in Darwin’s consumer price index (CPI) was 6.4% in 2022-23.
  • In year-on-year terms, growth in Darwin’s CPI is estimated to decline to 3.6% in 2023-24, slightly above the 2023-24 Mid-Year Report estimate of 3.5%.
  • CPI growth is expected to reach the RBA target range of 2-3% in 2025 as input cost pressures continue to ease (Chart 5).

Wage price index

  • In the December quarter 2023, annual wage growth in the Territory was at its highest level in almost 15 years, before slightly falling to 4.1% in the March quarter 2024 (Chart 6).
  • In year-on-year terms, the Territory’s wage price index increased by 2.8% in 2022-23. Wages are then estimated to grow by 4.1% in 2023-24, above the 2023-24 Mid-Year Report estimate of 3.6%.
  • Recent strength in wages have been a result of large one-off impacts from the transition to new enterprise agreements in the public sector and minimum wage increases tied to national inflation.
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