Many people in the mining industry have feared that the industry is slowing down in Australia. There have been many different rumors, some based off of at least partial facts, some based off of general assumptions, some based off of incorrect notions.
No matter what the source of the rumors, there is still a fear in the mining industry of what the near and distant future holds for the industry as a whole. Those in the industry are searching for answers or even clues to help them better read and understand what is to come, so that they can be better prepared.
Some Employment Rates Show A Slowdown in the Mining Industry
One of those tools that people are looking to for “clues” as to how the mining industry is performing is the employment rates. By taking a look at the Australia Jobs Report, we are able to see a potential drop in the mining industry. According to that report, the unemployment rate in the mining industry in Western Australia, for example, has risen from 4.1% in the beginning of the year to 5.2% at the beginning of last month.
Employment Rates Differ in Different Parts of the Country
As people have taken a look at these increases in unemployment in the mining industry, many people have begun to speculate that the mining industry as a whole is slowing down in Australia. They’ve begun to fear the future for the mining industry. But as they are jumping to fearful conclusions, they are forgetting to take a look at the whole picture.
Of course, these unemployment rates and their trends really depend on which area of the country you are talking about. While Western Australia has seen an increase in their unemployment rates across the mining industry during this year, that is not the case in all areas of the country. Victoria, for example, has seen a decrease in its mining unemployment rates over the past year. At the beginning of 2012, the mining unemployment rate was at 6.1%. But last month we saw the mining unemployment rate at 5.8%. So, although some areas in Australia have seen a rise in unemployment rates in the mining industry over the past year, areas like Victoria have seen those numbers go down. And in New South Wales, the mining unemployment rate has stayed about the same.
So yes, when you take a look at just a certain sample area, it shows that unemployment rates are up in the mining industry. But as you take a step back and look at the entire picture, or as you look at the job rates across the country, you will see that it all really depends on what area of the country you are referring to.
Mining Unemployment Rates On Trend with Rest of the State
While Western Australia has seen an increase in unemployment rates in the mining industry, it looks like those increases are on-trend with the rest of the state. According to Tom Kennedy, an economist living in Sydney, “Unemployment in Western Australia is now at its highest level since mid-2010. That jobless rate has been trending higher, and it may suggest that some kind of rebalancing in the labor market is occurring.”
So it seems to me that the rise in unemployment in the mining industry in Western Australia may be less telling towards what is happening in that specific industry, and more in line with a general lowering in the labor market in the state as a whole.
Overall Increase in Mining
To those people who have been worried that there is a slowing down of the mining industry in Australia, I say that if anything it is actually the opposite. The mining industry is responsible for 10% of all of the jobs in Australia. That is 50% more than what it accounted for just ten years ago. Although some areas of the country have seen a slowing in the mining industry, as a whole it still accounts for almost one fourth of the country’s national output, with resource companies still furnishing over $120 billion a year to the country’s economy.