NT to lead the nation in economic growth next year, according to new report

THE Northern Territory will lead the nation in growth next year according to the latest Deloitte Access Economics Business Outlook released today

THE Northern Territory will lead the nation in growth next year in a mixed report card in the latest Deloitte Access Economics Business Outlook released on Monday.

The Territory is expected to have healthy growth of 5.1 per cent, which is well ahead of powerhouse Victoria on 1.8 per cent. Next to the Territory is WA on 4 per cent.

The bad news is the Territory is coming off a very low base and it may not have been such a healthy rise without COVID-19.

The Northern Territory will lead the nation in growth next year in a mixed report card in the latest Deloitte Access Economics Business Outlook

Deloitte says the NT has done a remarkable job in protecting its population from the pandemic and, as a result, life is as close to normal as it can be in the Top End.

And with more tourists and visitors from interstate coming to the NT, the closure of international borders hurt the Territory less.

Deloitte also says because of border restrictions (and widespread social distancing restrictions in other states), much of the Territory’s traditional population outflow has been prevented, which could mean more people spending, helping to support struggling businesses.

“Yet despite the potentially positive news on the tourism and population fronts, the Northern Territory has been in a tough spot for a while now,” the Deloitte report states.

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“Domestic activity in the state has been in the doldrums for a number of years, with large-scale mining projects finalising construction and moving to production stages.

“That shift has seen exports rocket, but it has done little for job creation.”

Deloitte sees the number of major mineral and energy projects on the drawing board is a huge positive for the Territory, but “it falls very far short of what’s needed to fix all the territory’s woes”.

“Its relative lack of diversification has been a thorn in the Territory’s side for a while now, and the NT’s COVID recovery is at risk because of that,” Deloitte says.

“In particular, the global economy has just been hit for six. As the Territory has world-class mining potential, a healthy world economy is a leading indicator of projects getting built and exports chugging off to foreign ports.

‘There’s a COVID-sized hole in global prospects, and that means the usual turbocharger of stronger phases of Territory growth looks set to remain in the ‘off’ position for some time to come. Government at all levels is helping to support the NT through the worst of the pandemic.”

The Northern Territory will lead the nation in growth next year in a mixed report card in the latest Deloitte Access Economics Business Outlook

The Northern Territory Government poured in more than $383m: Home Improvement Scheme ($103m), Business Improvement Grant ($20m), Immediate Work Grant ($15m), Small Business Survival Fund ($50m) and the Business Hardship Package ($108m).

“In addition the feds have committed just over $40 million for ‘shovel-ready’ and road safety upgrade infrastructure projects,” Deloitte says.

“The projects include improvements to the Carpentaria, Stuart, Barkly and Victoria highways – key transport and freight roads that link remote areas of the Territory to the rest of the country. “

Deloitte says the road out of the pandemic for the Territory will be a long and winding one.

“It will be dependent on the continued control of the virus, encouraging businesses to pursue investment opportunities and successful marketing of the Top End as a destination for restriction-weary tourists. None of those are easy tasks,” Deloitte says.

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“After the initial bounce for growth generated by its early and substantive reopening – boosting measured 2021 growth in particular, the outlook for the Territory remains subdued. While government stimulus will provide much needed support, the Top End isn’t out of the woods.”