MCA - QUARTERLY ECONOMIC BRIEF - AUTUMN 2013

OVERVIEW
  • Global growth slowed in 2012, but some improvement in economic conditions late in the year points to a modest reacceleration of activity in 2013. While the growth outlook for a number of large economies remains subdued and the global economy vulnerable to new setbacks, risks appear more balanced at the start of 2013 based on an improved outlook in the United States and China.
  • The Australian economy grew at a moderate rate of 0.6% in the December quarter 2012 as a surge in resource exports helped offset a drag from inventories and sluggish consumer spending. Gross domestic product (GDP) rose 2.9% (y/y) in trend terms.
  • Strong investment in new mines and the expansion of existing operations are expected to boost production volumes in 2012-13 for key bulk commodities, though across the industry as a whole the forecast is for mixed results.
  • ABS figures for November 2012 reported a second consecutive quarter decline in mining employment. The data for the three months to November showed jobs in the mining sector fell by a net 8,400 to total 263,300 persons. This is still 20,500 or 6.4% more than November 2011 figures.
  • BREE estimates that export earnings from mineral resources (excluding oil and gas) increased from $153 billion in 2010-11 to $164 billion in 2011-12, an increase of about 7.1%. Minerals exports in 2011-12 accounted for more than 52% of total Australian goods and services exports, up from around 42% in 2006-07.
  • ABS data shows capital expenditure in the mining industry (including oil and gas) was $26.6 billion in the December quarter 2012 compared with expenditure for the rest of the economy of $17.5 billion. Capital expenditure in mining was more than the rest of the economy for the third consecutive quarter.
  • In original terms, mineral exploration expenditure fell 7.9% (or –$70.8m) to $823.9m in the December quarter 2012. The largest fall by minerals sought came from expenditure on gold exploration (down 16.3% or –$31.7m). The next largest fall came from expenditure on coal exploration (down 12.5% or –$21.4m).

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