NT economy remains in a world of pain but there is hope

The NT economy remains in a world of pain according to the latest Deloitte Access Economics’ quarterly Business Outlook released today. But the Chief Minister is playing down the scathing assessment

The lack of good employment has resulted in a population drop in the NT, according Deloitte Access Economics’ quarterly Business Outlook.

UPDATE: The Chief Minister has played down a scathing assessment that the NT economy is in a world of pain according to the latest Deloitte Access Economics’ quarterly Business Outlook released on Monday.

Despite the gloomy forecast Michael Gunner was optimistic when he addressed the media, insisting that the government was doing all it could to create more jobs after the wind down of the Inpex project.

He said they awarded 57 construction contracts valued at $31 million last month.

“The Inpex construction project was huge, it’s easily the biggest boom the Territory has ever had, and we knew coming out of the other side of that will hurt,” he said.

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“It absolutely hurts coming off that high … we know that in particular the construction sector is hurting.

“That’s why it’s important that we keep stimulating and creating construction sector jobs.”

EARLIER: The NT economy remains challenged but there are some signs of life, according to the latest Deloitte Access Economics’ quarterly Business Outlook released on Monday.

The report says outside of gas exports there is little other short-term good news for the Northern Territory which continues to lag behind most of Australia.

But Deliotte says there is some sunshine peeking through the otherwise gloomy outlook.

“The value of work done in the rail sector has made solid gains for a while now, while work underway in the road sector continues to shoot up,” it says. “Commercial construction in the Top End is showing a few signs of life. Building approvals also shot up from mid-2018 to early 2019, although they have come off the boil a little in recent months.”

The report highlights that job opportunities are still relatively few and far between and unemployment has climbed steadily over the past two years, with the only reason it is still below the national average being an even larger drop in the participation rate.

“The lack of good employment opportunities has resulted in a shrinkage in the size of the NT’s population,” the report says. “The number of Territorians leaving for greener pastures elsewhere in Australia continues to grow, while the number of migrants from overseas has also fallen.

“In turn, the resultant lack of income flowing into Territory pockets is taking its toll on retailers, with turnover going backwards over the past 18 months. And at the same time housing construction has also been feeling the pinch. Both housing prices and rents have been on a slippery slope for the last four years as demand for housing has fallen away with the broader business cycle.”

Deloitte Access Economics’ says a lack of demand in the economy is keeping a lid on business investment as well.

Adding further to the forecast Deloitte says the latest data on engineering construction in the Top End makes for tough reading.

“The value of work done has fallen by more than four fifths from the peak in late 2014, returning to levels last seen around eight years ago,” the report says.

“In short, the end of construction at the NT’s largest ever project — the $45 billion Ichthys LNG project — has well and truly taken its toll.”