AUKUS and Adelaide: How the Submarine Deal Is Reshaping the City's Economy

The AUKUS agreement, announced in September 2021 and further developed since, commits Australia to acquiring nuclear-powered submarines built in South Australia. The economic implications for Adelaide are profound and long-lasting, representing the most significant defence investment in Australian history and one that will shape the city for decades.

The scale of the project

The construction of nuclear-powered submarines at the Osborne Naval Shipyard in Adelaide will take decades and involve tens of thousands of workers at peak. The investment in shipyard infrastructure, workforce training and supply chain development represents a multi-hundred-billion-dollar commitment. Even the initial infrastructure investment phase is generating construction activity that is perceptible in the South Australian economy.

Workforce implications

The submarine program requires workers across a range of disciplines: naval architects, marine engineers, trades people, project managers, nuclear-trained technicians and many more. Australian institutions, including the University of Adelaide and TAFE SA, are developing training pathways. The program will import expertise from UK and US partners and will need to retain and develop significant local talent.

Housing demand

The influx of defence workers — both Australian and from partner nations — is adding demand to the Adelaide housing and rental market. This demand is concentrated in the northern suburbs near the Osborne shipyard and in the inner city areas popular with professional workers.

Broader economic impact

Supply chain companies from across South Australia and nationally are seeking to qualify as AUKUS suppliers. The program is expected to stimulate significant growth in the state's advanced manufacturing and technology sectors beyond the direct submarine construction activities.

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