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Category: Business, Economics and Finance / Government and Politics

NT economy 'losing momentum', falls to sixth in state rankings

Monday, 23 Jan 2017 08:21:10 | Xavier La Canna

Workers constructing the INPEX-operated Ichthys project Bladin Point gas processing facilities near Darwin. (ABC News: James Purtill)

The Northern Territory's economy is losing momentum and slipping in rankings against other Australian jurisdictions, according to the latest State of the States report.

The quarterly report from CommSec, which looked at the most recent economic figures for eight key indicators, found the Northern Territory had dropped from fourth spot to sixth spot, remaining ahead only of South Australia and Western Australia.

"The Northern Territory is losing momentum and indeed the economy fell from fourth spot to sixth on the performance rankings," the report says.

"The job market is strong, but population growth is weak, affecting consumer spending and housing demand."

Chief economist with CommSec, Craig James, said the biggest problem the NT had was its slow population growth.

Population growth in the NT was up just 0.22 per cent on a year ago — the weakest in the nation — and housing finance was 25 per cent lower than its decade average.

"If more homes are going to be built, more retail spending is going to occur. Then you need people coming through," Mr James said.

"That is happening in other states," he told ABC Radio Darwin.

He said the end of the gas construction boom had also had an impact, leading to weaker new investment figures.

Forward-looking indicators weak

On construction work done and unemployment the NT fared strongly, leading all other states.

But on forward-looking indicators such as population growth, housing finances and home starts, the NT is lagging other economies, the report says.

In terms of economic growth, the NT recorded the second strongest figure in Australia, with output 23.7 per cent higher than the decade average level, behind only New South Wales, which was 24.3 per cent.

Business spending, investment sinks

Business spending in the NT was down 38.3 per cent, the worst performance of any jurisdiction, while business investment was down 26.2 per cent.

Business spending:

  • New South Wales: Up 23.4 per cent
  • Victoria: Up 1.1 per cent
  • ACT: Down 6.7 per cent
  • South Australia: Down 12.8 per cent
  • Tasmania: Down 19.9 per cent
  • Queensland: Down 20.4 per cent
  • Western Australia: Down 34.2 per cent
  • Northern Territory: Down 38.3 per cent
NB: Change for September quarter compared to decade-average.

Credit: CommSec

Only NSW and Victoria had business investment levels above decade-average levels.

Despite some of the gloomy economic news, the Northern Territory has the strongest job market in the nation, with the unemployment rate steady.

"Not only is the jobless rate in the Northern Territory the lowest in the nation, but it is 10 per cent below its decade average," the report says.

The NT also led the way in construction work, which is 30 per cent above its decade average.

But the report said that compared to a year ago construction work in the NT was down 23.4 per cent, highlighting a "shift in momentum" that is underway.

"Even more concerning, commitments are now 17.6 per cent lower than a year ago," the report says.

AustraliaPlus


 

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