Australia's mining boom rolls on but slowing

Photo / Thinkstock
Photo / Thinkstock

Australia's mining boom will continue to roll on but decline slightly in coming years as commodity prices fall due to an increase in supply, the Federal Government says.

There's no cause for concern for miners for the time being, with businesses expected to invest a record A$120 billion ($154 billion) in the resources sector in 2012-13, the Government's Budget papers said yesterday.

If there is a decline it will, ironically, be related to the global mining boom leading to an increase in supply which could lower commodity prices.

Australia's terms of trade are at record high levels, sustained by high commodity prices.

The Government believes it has hit a peak with the terms of trade expected to decline 5.75 per cent in 2012-13 and 3.25 per cent the following year, albeit while still maintaining 140-year highs.

However, exports are tipped to grow by 4.5 per cent in each of those years.

Resources and resources-related sectors of the economy represented 9 per cent of output and employed 2 per cent of the workforce.

They were expected to account for 15 to 20 per cent of total GDP during the forward estimates and grow by an average 9 per cent a year. However, the non-resources part of the economy was forecast to grow at a below-trend average annual rate of 2 per cent over the next two years.

- AAP

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