The economic contribution of the mining industry is likely to significantly increase as the sector transitions from construction to an operating phase, according the Chamber of Minerals and Energy of Western Australia’s (CME) latest edition of the WA Resources and Economics Report, prepared in conjunction with KPMG.
Despite the anticipated deceleration in mining investment, this phase will see a significant shift in production levels in coming years – most notably in the bulk commodities and LNG sectors – will result in greater economic benefit to the State through company profits and additional royalty payments.
“Notwithstanding the softening of prices towards the end of last year, WA and the wider economy continues to benefit from the growth the in resources sector. Ongoing investment and growth is maintaining record levels of employment in WA,” CME Chief Executive, Reg Howard-Smith said.
Other key highlights of the First Quarter Report include:
- 2012-13 forecasts for GDP and GSP growth are revised to show 3 per cent growth for Australia and 5.2 per cent growth for Western Australia.
- The latest ABS December quarter national accounts reflect a 0.6 per cent increase in GDP during the December quarter, putting year-on-year growth at 3.1 per cent, fairly close to the long-run annual trend of 3.25 per cent.
- Actual and expected ABS capital investment expectations data indicate that investment for 2012-13 will post modest gains – in the order of 5 per cent over the previous year – but there will be an overall decline in capital expenditure in 2013-14 of a similar magnitude.
- Total mineral exploration expenditure continued to decline. After falling by 19 per cent in the September quarter, exploration expenditure fell by a further 4 per cent in the December quarter to $471 million.
“While the decline over two quarters in exploration expenditure is likely due to the weak commodity price environment, a continuation of the downward trend should be of concern to all stakeholders,” said Mr Howard-Smith.
The First Quarter report also features an interview with Mr Bill Marmion, the new Western Australian Minister for Mines and Petroleum; Housing. Mr Marmion discusses his achievements in the Environment portfolio and what he hopes to achieve working with the resources sector.
The March 2013 WA Resources and Economics Report is available here or by visiting www.cmewa.com