NT ranked third best economy in Australia, State of the States report says
The Northern Territory is listed as the third best economy in Australia, but signs are that growth in the jurisdiction is falling away, a new report has found.
The latest State of the States report from CommSec showed the NT led the rankings in five indicators out of eight, but overall was behind Western Australia, in second spot, and NSW, which was ranked Australia's best economy.
"Short term it (the NT economy) is likely to hold up well, but it is the mid-term that is a little more concerning," said CommSec economist Savanth Sebastian.
"I think it is fair to say that it has been outperforming over the last couple of years, but it is starting to slow."
The report said that economic activity in the NT was just over 34 per cent above its decade-average level, but in the past year the activity was down 1.2 per cent, suggesting its top-ranking may be at risk.
"The driver no doubt has been the mining sector," Mr Sebastian said.
NT's economy a 'one-trick pony'
He said top-ranked NSW had a broad base underpinning its growth, but the NT was a "one-trick pony" and was reliant on mining investment.
The NT also had the weakest economy in Australia for housing finance, down 13.4 per cent in trend terms compared to its decade average, well behind Western Australia, which led that ranking and was up 8.5 per cent.
Prices data showed the cost of living was increasing in the NT, with consumer prices up 3.3 per cent, and home prices rising 7.1 per cent, but wages failing to keep pace, lifting only 2.8 per cent.
The end of the construction phase of the $US34 billion Inpex project, due about 2017, and other resources projects coming to an end would also pose challenges, Mr Sebastian said.
"I have seen figures that show one in 10 workers who build the project are needed to actually work in it," he said.
"What are you going to do with the other nine workers?"
Strong confidence in NT economy: Government
Chief Minister and Treasurer Adam Giles welcomed news the NT was leading the nation in five out of right economic indicators.
"There is room for improvement in Territory housing finance but this is an area where the Government is currently investing huge effort and it is encouraging to see the annual growth of home loans in the Territory is now the fastest in the nation," Mr Giles said.
"The Northern Territory has secured the top spot on the retail rankings from Western Australia reflecting strong confidence in our economy," he said.
