Home' Employment Forecast : October 2009 Contents 21
The Age Employment Forecast
After one of the biggest resources boom for generations, this sector took a hit with the GFC. However, with the resurgent growth
in China and consequently quite robust demand for commodities, this sector is bouncing back fairly quickly. Already in the
June 09 quarter Mining Business confdence is now positive (+2.0), after a very low (-36.4) in March 09. A gauge of how quickly
business has turned for the better, is the speed in recovery in confdence since the March 09 quarter, as this was the lowest
result recorded, much lower than the 1991 recession levels. One of the little known consequences of the slowdown has been the
temporary closure of some Chinese mines as some are relatively high cost compared with Australian operations and this has
provided opportunities for our coal Mining companies.
Against a back drop of better economic growth, particularly from China and to some extent Japan, EMDA models are forecasting
a return to growth in this sector, with jobs increasing 0.8% on the May 10 quarter. Although growing, this is well below the boom
years when jobs growth nearly touched a staggering 25% p.a. The outlook does vary by sub-sector, Thermal exports are expected
to fall in value (approximately $8 billion) in 2009/10 and Iron ore as well, due to signifcant price reductions in April 2009.
However, this is after several years of exceptionally strong price growth. On the other hand the outlook for Liquefed Natural Gas
(LNG) is stronger as this is a relatively cleaner form of energy, so is therefore more in demand.
Longer term, this sector will get a huge boost from the Gorgon development and also the expansion of the Olympic Dam
(assuming this proceeds). Both of these projects are huge, even by the standards set by the mining sector. The Gorgon
development is forecast to produce 5 million tonnes per annum of LNG, contribute $64 billion to Australia’s GDP and generate
10,000 direct and indirect jobs at peak construction. The Olympic Dam expansion in SA is also very large, costing at least $9.2
billion and this fgure is likely to be much higher. There are also plans to expand coal production, with production expected to
increase by 30% over the next fve years despite the move to more cleaner fuels.
Trade Weighted Index
Source: EMDA Model 2009
Change in Jobs
Change in Jobs Quarterly
Improved commodity prices will stimulate jobs growth in this sector, but not to the boom conditions of 2008
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