As many as 50,000 more jobs are set to disappear as the boom in resource investment throughout Australia continues to wind down, according to the latest forecast.
In its latest report, National Australia Bank says around 46,000 jobs were lost over the two year period between the peak of the investment boom in 2012/13 and 2014/15, and that it expects another 50,000 to go before the current downturn bottoms out.
It says 65,0000 jobs will be lost in areas related to construction whilst 15,000 will be gained as more projects moved into operation.
In its report, NAB said that whilst the downturn in resource related investment was more than half complete, that in employment is less than half way finished due to the relatively high levels of labour intensity associated with some of the LNG projects which are winding up.
Whilst Queensland will experience heavy job losses, NAB says the biggest losses will be felt in Western Australia, which compared with its north-eastern peer not only accounts for a larger share of overall levels of investment and employment but also has an employment cycle within its resource sector which is less progressed in terms of its downward trajectory and has a project profile which has a lower level of labour intensity within the operational phases of the developments in question.
“We estimate that 46k mining jobs were shed between the peak in 2012-13 and 2014-15 and around 50k more will be cut going forward,” NAB said in its report.
The latest forecasts come amid growing fears that the resource sector downturn could be deeper than was originally thought.
In its latest forecast, Australian Construction Industry Forum suggests that the dollar value of construction work done on major resource projects throughout Australia could drop from a forecast $38.6 billion in the current financial year to $21.5 billion in 2019/20.
The pipeline of projects, too, is shrinking. In the first quarter of this year, information services provider Cordell said that whilst the number of resource related projects which were in construction had grown from 78 to 139 year-on-year and had increased in value from $23.1 billion to $54.7 billion, the forward pipeline of work which had not yet proceeded to construction had dropped from 210 projects to 119 over the same period.
In its report, NAB says the contraction in resource sector investment is unlikely to derail the overall economy as the fall in resource sector work is offset by increasing levels of momentum in other areas of the economy such as services.
According to the Australian Bureau of Statistics, the overall number of people employed in Australia’s mining sector stood at 223,200 as at February – down by more than 50,000 compared with the 275,200 when compared with the height of the boom in May 2012.