A new report by the Grattan Institute has found that Australia’s manufacturing sector can bounce back from the mining investment boom.
Reported by Fairfax Media, and titled The Mining Boom: Impacts and Prospects, the report found that instead of being destroyed by the mining boom, interest rate sensitive industries such as manufacturing survived it “in reasonable shape”.
It also found that manufacturing’s share of annual GDP had been declining since the 70’s, and the boom simply “temporarily accelerated” its slow-down, and now there’s a chance for it to come back up again.
“Within three years, manufacturing exports as a share of GDP had risen by more than a third on average,” the report finds, according to Fairfax.
“Therefore temporarily high exchange rates in economies comparable to Australia have not had long-lasting effects on export volumes and the added value of manufacturing.
“Manufacturing exports usually bounce back rapidly and reach trend within a few years.”
The report also says that as Australia has avoided high inflation, a recession is “far from inevitable.”
Read more here.
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