75,000 jobs to go in mining’s new phase AS many as 75,000 resource-related jobs will be lost in the next couple of years as the industry’s $450 billion investment splurge on new capacity winds down, according to research by ANZ. The toll on job numbers in the industry, as the switch from the job-intensive construction investment moves to the job-light operational phase, means the bank’s economists think there will be little improvement in the nation’s 5.8 per cent jobless rate. ANZ senior economist corporate and commercial Justin Fabo said he expected 50,000 to 75,000 high-paid resources-related jobs to be shed across the economy during the next couple of years, creating a headwind to overall employment growth. The job losses mean at least 150,000 new jobs will have to be created on an annual basis to maintain a stable unemployment rate. “Weaker than expected commodity prices would tilt the risks to more job losses as mining firms seek to cut costs,’’ Mr Fabo said. “So we think the unemployment rate will be in spitting distance of 6 per cent over the next 12 months, and for improvement after that to be gradual.’’ Mr Fabo said a decline in mining-investment related employment (as resources investment falls from a peak of about 8 per cent of gross domestic product to close to 3 per cent) would be partly offset by a ramp-up in operational mining jobs, but in net terms ANZ expects another 50,000 to 75,000 jobs to be lost. An industry snapshot last year by the Australian Workforce and Productivity Agency put total jobs in the resources industry at 263,000, which represented an 80 per cent increase across five years. But there has been a rash of job cuts since, mainly in the price-stressed coal industry and those flowing from the capital expenditure cessation in Pilbara iron ore. A loss of 50,000 jobs from the sector would represent a decline of 20 per cent, or 28 per cent should 75,000 jobs fall. Mr Fabo emphasised it was not clear how many of the workers losing their resource-related jobs would end up unemployed. The foreign workers component could return home, and others could be absorbed by other parts of the economy, albeit not on the above-average wages of the resources industry. That latter point meant that there could be an out-sized impact on household income and spending. The resources industry is capital rather than job-intensive. It is not a big employer of workers either way, accounting for only 2 per cent of the total workforce of 11.5 million people. But it does underpin ANZ expectations that Australia’s trade balance will improve from a deficit of 1.5 per cent of GDP in 2012 to a surplus of more than 2 per cent over the next three years. Despite being more bearish than most on iron ore prices, the ANZ expects iron ore exports — Australia’s biggest — to grow from $55bn in 2012 to $75bn by 2020, helped in part by a fall in the dollar to about US84c. Exports of LNG, where $170bn in investment in Queensland and Western Australia is fast coming to an end, are forecast to rise in value from $15bn in 2013 to $67bn in 2020. And despite the hit on jobs, Canberra is set to benefit from additional company tax revenue. “This phase of the mining boom, however, will not be as lucrative as Phase I,” ANZ said. theaustralian.au/business/jobs-to-go-in-minings-new-phase/story-e6frg8zx-1226974318684?nk=46d867b4fda24c7d69f18357266020e8
Posted on: Sun, 06 Jul 2014 05:33:34 +0000