A NEW report has predicted mining production in Australia will soar by 41% over the next five years, balancing the economic impact of declining resource investment.
Released by economic group BIS Shrapnel, the Mining in Australia 2013-2028 report shows that iron ore and LNG exports will continue to increase in coming years, bolstering the resource industry’s GDP share from 18.7% to 19.8%.
Head of BIS Shrapnel infrastructure and mining Adrian Hart told Australian Mining the prediction reflected an economic transition from investment-led growth to production-led growth.
“By 2017-18, annual fixed capital investment is forecast to have shrunk to $66bn as a new, smaller round of developments begins to ramp up,” he said.
“With respect to the mining boom, it’s probably fair to say that this is not the beginning of the end but the end of the beginning,” he said.
“Over the next five years the strong boost from mining production, led by LNG and iron ore, will more than offset the economic negatives from falling mining investment which will flow through to construction and manufacturing.”
As a side effect of the transition, Hart also said employment levels across the resource industry would fluctuate greatly, but productivity levels would increase to complement the slowing job creation.
“We expect that mining operations employment will rise only 11% over the next five years, mainly in oil, gas and iron ore, whereas mining construction employment will slump 40%,” he indicated.
“Given the strong increases in production expected, this translates to a 60 per cent labour productivity surge over the next five years.”
Much of the growth predictions bank on major trade partner China, which the Australian Bureau of Statistics said accounts for 36% of Australia’s total exports.
China’s emerging economies in industrial production, retail sales and urban investment are expected to contribute to the Australian resource industry output.
For more information about the BIS Shrapnel report, click here.