ABS figures show the Territory economy is shrinking

For the third consecutive quarter, the NT economy has shrunk. Read what’s causing the downturn.

The Northern Territory economy is officially in recession.

The latest ABS national accounts figures show the NT recorded its second quarter of negative state final demand.

SFD records the total value of goods and services exchanged within a state or territory, but excludes interstate and overseas transactions.

ABS data showed the NT economy shrunk by 1 per cent in the June quarter — one of only two jurisdictions along with Tasmania to record a growth decline.

The national economy grew by 0.4 per cent over the same period. The NT government denied there is a recession.

The Territory needs major projects to get the economy to grow.

The Queensland and South Australian economies both recorded 1.3 per cent growth during the June quarter.

The NT outcome was driven by a 1.5 per cent decline in government consumption, offset by a 0.4 rise in household spending driven by transport costs such as petrol and new car purchases, now the vehicle delivery backlog has eased.

The serious incapacity to get major resources projects off the ground in the NT is reflected in a 12.4 per cent fall in non-dwelling construction driven by a reduction in mining infrastructure investment.

CLP MLA for Namatjira Bill Yan. Picture: Che Chorley

NT Chamber of Commerce chief executive Greg Ireland said Defence spending was still driving infrastructure development in the NT but the private sector was “waiting for something to happen”.

“It doesn’t paint a particularly positive picture of the economic trends with states going up and we’re going down,” he said.

“I’ve been saying publicly and privately for some time that the slowdown is driven by delays in major projects and uncertainties around fiscal and physical activities that were forecast by now are yet to materialise.”

The Country Liberal Party declared the economy in technical recession.

Shadow Treasurer Bill Yan said the NT was “last in the nation”.

“Territorians have had a gutful of Labor’s spin and excuses, crime is out of control, the Territory’s reputation is in tatters and our economy continues to go backwards,” Mr Yan said.

A technical recession is usually measured by two or more successive declines in economic growth as measured by gross domestic product or gross state product.

While SFD records domestic demand without interstate or overseas trade, the result showed the NT economy is in serious decline.

The Territory government wants to grow the economy to $40bn by 2030 from the current $26bn base.

The NT government would love Sun Cable to develop the Australia-Asia Power Link.

Deputy Chief Minister Nicole Manison said there is no recession.

”Since December 2019, our state final demand has grown by 16.3 per cent, significantly more than any other jurisdiction,” she said. “The definition of a recession as two consecutive quarters of negative gross domestic product (GDP) growth is commonly used for national economies. The state/territory equivalent to GDP is gross state product (GSP), which is only published by the ABS annually.”

“In 2021-22, the most recent GSP data available, the Territory’s GSP increased by 4.7 per cent to $26.1bn. This was the third strongest result of all the jurisdictions. 2022-23 GSP outcomes are expected to be released in November 2023.”

The ABS revised down the March quarter SFD figure from -0.4 per cent to -1.2 per cent and the September quarter figure was -0.5 per cent, meaning three consecutive quarters of decline in domestic consumption.

The Territory is sweating on a number of major projects achieving final investment decision including Arafura Rare Earths Nolan’s project, the Beetaloo Basin development, Santos’ Barossa gas project and work to begin on the ship-lift project. Projects such as Sun Cable’s Australia-Asia Power Link.

The ABS will release the annual gross state product data on November 21.

The NT government has been contacted for a response.