Resources sector continues to support economic stability: report
Investment in the WA resources sector continues to surge and will be the key driver of growth in the WA economy for 2012-13, according to a report by the Chamber of Minerals and Energy of Western Australia (CME) in conjunction with KPMG.
The December 2011 edition of the WA Resources and Economics Report shows the resources sector continues to provide stability to the economy and is keeping unemployment down.
CME Chief Executive Reg Howard-Smith said seven projects – one energy, five mineral mining and one infrastructure – were completed in the six months to October 2011.
“A number of major projects are expected to begin production over the next two years, while demand for iron ore and natural gas remains very strong,” Mr Howard-Smith said.
“Labour demand in the WA resources sector has contributed to the lowest unemployment in the country at 4.3 per cent and direct employment in the resources sector cracked the 100,000 mark for the first time in December.”
“Growth in exports is forecast at a rapid pace of 8.56 per cent in 2011/12, with even stronger growth expected in 2012/13, in line with higher production of LNG over the medium term.”
The largest increases in production were recorded for iron ore (8.9 per cent) and titanium minerals (22.6 per cent). However the average export unit value of iron ore fell 5.8 per cent during the quarter and marks the second consecutive quarter in which the export unit value has fallen.
The European debt crisis has seen investors flock to gold which continues to be a sensible bet with the gold price increasing by 14.1 per cent during the quarter.
Mr Howard-Smith said an increase in uranium exploration of 28 per cent showed the market was recovering from the Fukushima nuclear incident.
“News of the Federal Labor Party agreement to overturn its ban on uranium exports to India and a slight relaxation by WA Labor its uranium policy may also continue to see a positive impact on exploration in 2012,” he said.
Other key findings in the December 2011 WA Resources and Economic Report:
• The WA resources sector continues to out-perform the All ASX and S&P/ASX 300 indexes
• Mineral exploration accounted for almost half of the total $970million exploration expenditure in WA, rising by 7 per cent to $482million
• Gross State Product is expected to grow to 4.3 per cent in 2011/12, climbing to 6 per cent in 2012/13 and 2013/14
• At the end of October 2011, there were 40 projects at an advanced stage of development in WA. Total capital expenditure on these projects was at a record $147.5billion – an increase of $38billion or nearly 35 per cent from April 2011
The December report also identifies key challenges for infrastructure development to support the resources sector.
The report is available here.