Remarks made by Professor Quentin Grafton at the Australian National Conference on Resources and Energy (ANCRE) 2012
18 September 2012
In his address to the Australian National Conference on Resources and Energy today, Professor Quentin Grafton, Executive Director and Chief Economist of the Bureau of Resources and Energy Economics, discussed the economic benefits that have come with Australia’s Millennium mining boom and his outlook for its future.
“The effects of the Millennium Boom on the resources sector have been profound. Direct employment in the mining sector almost tripled from about 90 000 in 2002–03 to around 250 000 in 2011–12. The value of minerals and energy exports has increased in real terms (2011–12 dollars) from $73 billion in 2002–03 to $193 billion in 2011–12” said Professor Quentin Grafton.
On the employment effects of the mining boom, Professor Grafton said ‘since the start of the boom Western Australia has increased the volume of its bulk commodity exports by 155 per cent, its employment in the mining sector by 192 per cent and the value of investments in advanced major mining projects by a stunning 1335 per cent. Queensland experienced even larger percentage increases than Western Australia in terms of mining employment (242 per cent) and the value of advanced major mining projects (1799 per cent).”
“The mining boom has been unambiguously good for the Australian economy and has allowed us to weather the storms of the GFC better than almost any other developed economy and allowed for real income growth of about 40% over the past decade.”
On the current debate on the status of the mining boom, Professor Quentin Grafton outlined his view that there are three distinct phases which characterise the boom.
The “price phase of ever increasing prices ended in 2011. The second, investment phase began in earnest around 2008 and has yet to peak. The third, volume phase has many years to run and, unlike the price and investment phases, it is unlikely to result in a ‘peak and decline’, but rather a levelling out of volumes. These volume increases in resources and energy exports will be long lasting and will help sustain the benefits of the Millennium Boom well beyond the price peaks of 2011.”
In closing, Professor Grafton noted “the easy gains of ever increasing real prices for hard commodities are over. A forecast declining terms of trade requires that Australia substantially increase its productivity growth to be able to maintain the rate of increase in real incomes enjoyed over the past decade.”
Further details on Professor Grafton’s speech are available on the BREE website at www.bree.gov.au .
For media enquiries, contact Professor Quentin Grafton on 02 6243 7483 or Quentin.Grafton@bree.gov.au