Whilst Western Australia remains the strongest economic performer overall, a $34 billion liquefied natural gas project has propelled the Northern Territory to the top of the nation’s tables in terms of construction activity compared with historic averages, according to the latest report ranking the economic performance of states and territories throughout the nation.
Released on Monday, the ComSec State of the States report ranks the economic performance of each state in the most recent quarter for which data is available against decade averages according to eight different criteria: construction work done, housing starts, housing finance, population growth, retail spending, equipment investment, employment and economic growth.
Whilst Western Australia continues to lead the nation overall, the Northern Territory took out top spot in terms of construction work done, with the overall value of work done throughout the territory in the June quarter ($131.0 billion - ABS estimate, seasonally adjusted) up 72 percent compared with decade averages and 30 percent compared with the same period last year.
Driving activity in this area is the $34 billion Ichthys LNG Project being built by Japanese energy giant INPEX.
Set to have an annual production capacity of 8.4 million tonnes of LNG once operational, work on the five-year project was started late last year and will involve the building of offshore exploration facilities in the Browse Basin off the north-west coast Western Australia, onshore processing facilities in Darwin and an 885 kilometre pipeline linking these.
With an estimated peak construction workforce of 2,000, the importance of the development in the context of the territory’s overall construction sector cannot be understated.
Already, the number of people employed within the industry throughout the territory has risen by more than 20 percent from 12,000 in the three months to August 2011 (ABS estimate, full-time and part-time combined) to 14,500 in the three months to August 2013.
Outside of Ichthys, the NT construction sector is also benefiting from strong growth in housing, whereby the 516 dwelling starts the ABS says took place in the June quarter was up 52 percent compared with ten-year-averages, placing the territory as second only to the Australian Capital Territory (53 percent) in terms of performance compared to historic averages in this area.
In other states, Western Australia and Queensland also recorded strong levels of construction activity relative to decade averages (up 65 percent and 45 percent respectively) whilst Tasmania (down 9.7 percent) is the only state performing below long-term trend.
Notwithstanding the slowdown in resource investment, ComSec Chief Economist Craig James is optimistic about the overall economic outlook going forward.
“All economies should lift now that the uncertainty of the Federal Election is finally out of the way” James said in the report.
“While a slowdown in mining investment will affect some regions, this will be offset by a lift in residential building. NSW, Western Australia, Queensland and ACT are expected to benefit most from a lift in home building.”