Expenditure approach: GSP (E)

State final demand

In 2019-20, the Territory’s state final demand (SFD), which measures total domestic expenditure within the local economy, fell by 4.9% to $23.5 billion from $24.7 billion in the previous year. The fall in SFD reflects a decline in private business investment, driven by the completion of the construction phase of the INPEX LNG project, uncertainty weighing on business investment decisions, and COVID-19 restrictions in the second half of 2019-20 affecting household consumption.

This marks the third successive year of declining SFD, attributed to the completion of works on the Ichthys LNG project and corresponding decline in investment. Current SFD levels are around the same levels as at 2010-11 and below the 10‑year average of $27.9 billion.

SFD growth is expected to be flat in 2020-21, before rising to 0.5% in 2021-22.

Northern Territory SFD value and YoY growth rates, inflation adjusted - see above for detailed description of graph.
Source: Australian Bureau of Statistics catalogue number 5220.0; Department of Treasury and Finance

Northern Territory state final demand components growth - see above for detailed description of graph.
Source: Australian Bureau of Statistics catalogue number 5220.0; Department of Treasury and Finance

Source: Australian Bureau of Statistics catalogue number 5220.0

Consumption

In 2019-20, consumption expenditure (public and private) comprised 81% of SFD. Total consumption expenditure fell by 0.5% to $18.9 billion from $19.0 billion in 2018-19, driven by a 3.6% decline in household consumption to $10.5 billion, partially offset by a 3.7% increase in public consumption to $8.5 billion.

The main categories that contributed to the decline in household consumption were:

  • hotels, cafes and restaurants (down by 13.3% to $1.2 billion)
  • transport (down by 14.1% to $832 million)
  • alcoholic beverages and tobacco (down 6.4% to $410 million).

Partially offset by increases in:

  • furnishings and equipment (up by 3.9% to $506 million)
  • communications (up by 5.1% to $187 million)
  • food (up by 0.6% to $1.0 billion).

Commonwealth consumption expenditure in the NT, which increased by 7.6% to $3.5 billion, was the main contributor to the rise in total government consumption.

Growth in household consumption is expected to remain subdued over the medium term, reflecting uncertainty in the employment outlook as a result of COVID-19, despite the relative resilience thus far, supported by JobSeeker and JobKeeper, as well as the one-off impact of the early access to superannuation and the bringing forward of scheduled income tax cuts.

Source: Australian Bureau of Statistics catalogue number 5220.0

Investment

In 2019-20, total investment was $4.5 billion, of which $3.2 billion was private sector investment (70%) and $1.4 billion was public sector investment (30%). Total investment decreased by 19.7%, primarily due to a 20.2% fall in private investment. Public investment decreased by 18.5%.

Private business investment is the largest component of private investment and the value of business investment was $2.5 billion, 78% of total private investment and 54% of total investment.

Private business investment is forecast to decline over the next two years, as the NT economy transitions from the completion of the INPEX project construction phase. Over the medium term, the level of private investment will be influenced by global demand for Territory resources, the Territory’s cost competitiveness in producing resources and the risk appetite of investors.

Northern Territory investment, inflation adjusted - see above for detailed description of graph.
Source: Australian Bureau of Statistics catalogue number 5220.0; Department of Treasury and Finance

Source: Australian Bureau of Statistics catalogue number 5220.0

International and interstate trade

International trade

In 2019-20, net exports of goods and services increased by 54.3% to $11.3 billion, from $7.3 billion in 2018-19. This was primarily driven by an increase in merchandise exports of 37.0% from $10.1 billion to $13.8 billion, and a decline in merchandise imports of 5.2% from $2.9 billion to $2.7 billion. Services exports decreased by 9.5% from $756 million to $684 million, while services imports decreased by 27.1% from $632 million to $461 million.

International exports are set to decline in 2020-21, mainly due to COVID-19 restrictions affecting international borders, impacting tourism and defence-related services exports, as well as goods exports stabilising as LNG production plateaus, and live cattle exports moderate.

Northern Territory international trade, inflation adjusted - see above for detailed description of chart..
Source: Australian Bureau of Statistics catalogue number 5220.0; Department of Treasury and Finance

Source: Australian Bureau of Statistics catalogue number 5220.0

Interstate trade

The Territory has a large trade deficit with other Australian jurisdictions. The net interstate trade data is part of the ‘balancing item’ in the Australian Bureau of Statistics (ABS) national accounts. It is estimated that over 90% of the balancing item is attributable to interstate trade. In the 2019-20 national accounts publication, the balancing item was substantially revised for the time series. For example, in 2018-19 the ABS estimated the balancing item to be -$1.9 billion, but in 2019-20 it was substantially revised to -$7.9 billion. In 2019‑20, the balancing item was -$8.5 billion.


Last updated: 11 January 2021

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