More mining jobs will emerge as the sector moves from the construction to production phase in the coming years, analyst firm BIS Shrapnel predicts.
A BIS Shrapnel report argues that while capital investment is waning, mining activity – including mining-related construction and manufacturing – will contribute a growing share of GDP, from 18.7% currently to 19.8% in 2018.
The coming five years will see capital investment fall 20% to $66 billion but production grow 41% from a base of $151 billion in 2012/13, driving more mining operations activities, maintenance and exports.
“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,” said BIS Shrapnel’s infrastructure and mining senior manager Adrian Hart.
“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.
“Consequently, BIS Shrapnel is forecasting mining activity as a share of GDP to rise from 18.7 per cent to 19.8 per cent; Australia becomes a more mining-focused economy from here.”
BIS Shrapnel said miners had lost productivity since the mid-2000s as they raced to expand, but were “going to extraordinary lengths” to improve, especially in the face of lower commodity prices and a high AUD.
Labor productivity is expected to surge 60% in the coming five years, as mining construction employment falls 40% and mining operations employment grows only 11%, mainly in oil, gas and iron ore.
From the report:
Total operational employment in the mining sector rose to 184,000 persons in 2012/13 (excluding construction workforces and non-operational roles), despite a fall in coal employment.
Over the next five years, operational mining employment is expected to rise a further 11 per cent.
Mining employment as captured by the Australian Bureau of Statistics is forecast to fall 12 per cent during the same period, reflecting a sharp drop in mining-related construction employment and cuts to non-operational roles to boost productivity.
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