We haven’t seen the worst of the mining downturn in Australia. According to the BIS Shrapnel’s Mining in Australia 2015 to 2030 report, the sector is likely to see upwards of 20,000 jobs fade away by the end of 2018 as mining investments are predicted to fall by 58 percent over the next three years.
“We haven’t hit bottom yet on commodity prices or investment, which will continue to be a key drag on Australian economic growth from here,” Adrian Hart, senior manager at BIS Shrapnel, said in a statement. “While mining production will rise strongly, led by new liquefied natural gas (LNG) exports, this growth will be far less employment intensive than the investment phase, albeit offering contractor opportunities for maintenance and facilities management.”
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Since 2014, mining investments in Australia have fallen 11 percent with roughly 40,000 direct jobs being axed in the process.
“The persistent drag from falling mining investment has important ramifications for the economy. Quite simply, Australia badly needs new investment drivers beyond mining to provide sustainable growth in jobs and incomes,” said Hart.
According to the report, the one consolation is that production volumes are estimated to rise six percent over the next five years led by LNG exports, including increases in contract mining activity and the mining maintenance market.
Given strong growth in production and related services combined with a falling level in investment, the BIS Shrapnel report points out that Australia’s mining industry represents around 20 percent of the national economy.
“The value of mining production has grown at an annual average rate of 7.1 percent over the past five years – and there is more growth to come. Mining production is forecast to expand by over one third again over the next five years – around double the pace of the national economy – taking the value of industry output to $186 billion in Gross Value Added terms (GVA) by 2019/20,” said BIS Shrapnel economist and report author, Rubhen Jeya.
Read the full report here.