NT economic growth

Approaches to calculating gross state product

Gross state product is calculated using three different methods: expenditure approach, income approach, and production approach. In the expenditure approach the key components are consumption, investment and interstate and overseas trade. In the income approach gross state product is calculated using the compensation of employees (wages and salaries), gross operating surplus (return to capital and entrepreneurship). In the production approach gross state product is calculated by using industry sector gross value added (gross value added equals output minus intermediate use of inputs). All three approaches should give the same figure for gross state product each year.

Gross state product

In 2017-18, the Northern Territory (NT) economy grew by 1.7% to $26.2 billion, as measured by gross state product (GSP) (inflation adjusted). This was below the national rate of 2.8% and less than the 2.7% rate reported for 2016-17. The Territory reported the lowest growth rate of the Australian jurisdictions while the Australian Capital Territory reported the largest increase at 4.0%.

The moderation in Territory GSP growth was largely driven by falling private investment as the construction phase of the Ichthys LNG plant neared completion and the project transitions to the operational and export phase. The fall in private investment was partially offset by an increase in net exports and public investment.

In 2017-18, Territory GSP, in current prices (not adjusted for inflation), increased by 2.3% to $26.35 billion.

Territory GSP is forecast to grow by 2.9% and 4.3% in 2018-19 and 2019-20 respectively, largely due to increased LNG exports from the INPEX Ichthys plant.

Northern Territory gross state product actual growth over the past ten years and the Department of Treasury and Finance’s forecasts over the next four years.

Chart 1: NT GSP, chart 2: GSP by jurisdiction, chart 3: GSP comparison

Last updated: 12 April 2019