Business

RBA figures show mining industry boosts resource economy

RBA paper reveals 1.1 million jobs were created in the resource economy since 2004-05.
RBA paper reveals 1.1 million jobs were created in the resource economy since 2004-05. Peter Holt

FOR every job created in the resource and mining industry in the past six years, an extra three jobs was created across the mining services industries, new research from the Reserve Bank has revealed.

The RBA research revealed the share of workers directly employed in the extraction of Australia's gas and minerals was just one quarter of those employed across the entire "resource economy", which includes contractors like engineering and business services companies.

In an unusual insight into the employment figures related to mining and resources, the RBA paper revealed some 1.1 million jobs were created in the resource economy since 2004-05, about 500,000 of which were in businesses other those actually doing the digging.

The research shows that despite the overall failure of the Federal Government's mining tax to "spread the benefits of the boom", the economy itself seems to have spread the income of mining fairly widely among business sectors.

"Under certain assumptions for relative prices, the spill overs from the resource sector to activity in other industries appear to be large," the paper reads.

"While construction and transport have obvious connections to the resource sector, business services (for example, engineering, legal and accounting services) account for a larger share of resource-related activity."

The paper also showed the national economic contribution of the resource economy accounted for about 18% of gross value added income, in 2011-12.

"Of this, resource-related activity accounted for about one-third, which includes activities as diverse as business services, construction, transport, and manufacturing," the paper reads.

"The remaining two-thirds of the resource economy was accounted for by the resource extraction sector itself (which also includes some processing of resources)."

But while the eight year-long rise in prices for minerals such as iron ore spread the income fairly widely, the resource sector and the regions it supports was facing major changes.

"Once the peak in resource investment has passed and the resource boom enters its production phase, the share of labour employed in the more labour-intensive resource-related industries is likely to decline and the share employed in the less labour-intensive resource extraction sector is likely to rise further," the paper reads.

Topics:  business economy employment jobs mining industry rba



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