Over the last few months there has been a lot of focus about the end to the mining boom. But there is a growing body of evidence that while the mining investment boom, the building of the infrastructure necessary to do the mining, may be past its peak the mining boom — or the digging stuff up phase — is not. It’s an important point to remember about the Australian economy at a time when many are getting a bit down on the economic outlook in the years ahead.
In it’s latest bulletin the Reserve Bank of Australia has a number of great research papers but one that is important to the outlook for the Australian economy going forward was The Performance of Resource-exporting Economies by Ellis Connolly, Jarkko Jääskelä and Michelle van der Merwe of the RBA’s Economic Analysis Department.
They are looking at resource export nations as a whole but in the context of Australian growth three charts stand out.
Australia’s Terms of Trade
That is a huge uplift to national incomes.
Mineral Investment Projects
Still very strong.
Iron Ore Exports
Projected to increase as the mines transition from investment to productuion.
Not for a minute are we thinking that this transition in the mining industry going to be without pain for the Australian economy but there seems to be growing evidence that mining is still going to be a substantial boon to the Australian economy for many years and will continue to balance out household restraint.
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