CommSec report shows the Territory economy remains stuck in neutral

The Territory economy is stuck in neutral, according to the latest CommSec report. See where it’s lagging.

A change of government has had no obvious impact on the Northern Territory economy yet, according to the latest CommSec State of the States Report.

The September quarter edition of the three-monthly economic overview found the Territory economy remained the nation’s worst-performing, with Western Australia back on top after a decade.

South Australia and Queensland ranked equal second, with Victoria, Tasmania, New South Wales and the ACT coming in behind.

CommSec chief economist Ryan Felsman said jurisdictional economies remained resilient despite Reserve Bank efforts to slow growth.

“Overall, economies have slowed in response to higher interest rates and inflation,” Mr Felsman said.

“However Australian states and territories are proving resilient due to a strong job market and solid population growth.

Retail spending in the Territory was up for the year to September. Picture: Pema Tamang Pakhrin

“As consumers respond to higher borrowing costs and price pressures, the future path will depend on whether the job market can hold up as well as the trajectory of interest rates over the coming months,”

In the report, CommSec acknowledged concerns about its reporting raised by the previous NT Government that the decade-average method of assessing economic performance disadvantaged the Territory because of the disproportionate impact of the Inpex construction from 2012-2018.

The report also acknowledged the Top End economy had performed better over the past 12 months, ranking first for retail spending and equipment investment.

But it said housing finance remained a key weakness and ranked the Territory economy in last place on five of the eight indicators.

The Territory’s unemployment rate is 4.4 per cent.

The Territory’s preparations for gas production at Beetaloo, as well as the imminent completion of the Barossa offshore project, has seen a surge in equipment investment, leaping 40.3 per cent in the September quarter above the decade average.

But construction work remained slow, with the September quarter average 34.2 per cent below the decade average.

While the Territory had the country’s second strongest quarterly population growth in September at 0.81 per cent, it is more than 2 per cent behind WA’s 2.82 per cent annual increase.

CommSec reported the Territory’s housing finance commitments were 14.8 per cent below the decade-long average - the only jurisdiction to record a negative figure across the decade. Consequently, dwelling starts in the Territory in the September quarter were 52.8 per cent below the decade long average and construction work 34.2 per cent below the decade average.

At 3 per cent, the Territory had the lowest annual wages increase in the September quarter, with CPI at 2.2 per cent and home prices up 0.8 per cent in December, compared to WA’s 19.1 per cent increase.

The Territory’s unemployment rate of 4.4 per cent was 13 per cent below the decade average.

The NT Government was contacted for comment.

Originally published as CommSec report shows the Territory economy remains stuck in neutral