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 2023-24 Mid-year report.

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 2.9% (Chart 2), this is 0.2 percentage points higher than the 2023-24 Budget report forecast of 2.7%.
  • Over the forward estimates, economic growth in the NT is likely to be heavily influenced by progress on the Barossa project. In the near term, uncertainty relating to the timing of major offshore works continues to present a risk to the economic forecasts, although current advice is that the project remains on time and within budget. Business investment is expected to fall in 2025-26 following completion of the construction phase of the project. However, this should be offset by increased exports as LNG production from the Barossa field commences.
  • 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 3.1% in 2023-24 before declining in 2024-25 (down by 0.5%) (Chart 2), with private investment (mainly business investment) falling as the construction phase of the Barossa project winds up.

Population

  • The NT’s population increased by 0.8% in 2021-22 to 250,233 people.
  • The NT’s population is expect to grow by 0.8% in 2022-23, with a rebound in net overseas migration since the easing of Australia’s international border restrictions in late 2021, particularly with the arrival of students and other temporary visa holders
  • The strong migration levels seen in 2022-23 are expected to return to long-term trends over the forecast period as the impact of the pandemic on migration patterns subsides. Annual population growth is expected to average 1% over the forecast period.

Employment

  • Resident employment in the NT increased by 4.1% in 2022-23, in line with the 2023-24 Budget estimate.
  • NT employment is expected to increase by 2.2% in 2023-24, then remain steady in 2024-25. These forecasts align with the expected trajectory of local economic activity over the medium term.

Unemployment rate

  • The NT’s unemployment rate averaged 3.7% in 2022-23, below the 2023-24 Budget estimate of 3.9%
  • The unemployment rate is estimated to increase to 4.2% in 2023-24, then 4.3% in 2024-25 (Chart 4).

Consumer price index

  • Inflation in Darwin fell to 4.3% in the September quarter 2023 from its peak of 7.1% in the December quarter 2022. In year-on-year terms, growth in Darwin’s CPI was 6.4% in 2022-23, consistent with the 2023-24 Budget estimate.
  • While there are some risks to the inflation outlook, outcomes to date have been in line with the Budget forecasts (Chart 5).

Wage price index

  • In year-on-year terms, the Territory’s wage price index increased by 2.8% in 2022-23 (Chart 5), slightly below the 2023-24 Budget estimate of 3%.
  • Recent strength in private wages has been driven by tight labour market conditions and the Fair Work Commission’s decisions to increase minimum wages in line with inflation.