Over the past week, the Australian Bureau of Statistics (ABS) has released a range of datasets that suggest that the mining investment boom is close to peaking (if not already), including data on the value of engineering construction work done, private sector capital expenditure, as well as minerals and petroleum exploration expenditure.
Mining capital expenditure (capex) hit a record 6.5% of GDP in the September quarter (the December quarter’s figures won’t be known until the National Accounts are released later on today), which has more than doubled over the past two years (see next chart).
Although December’s mining capex was slightly higher than September’s, and represented a fresh all-time high, both engineering construction and minerals exploration expenditure fell, suggesting the investment peak is close (see next chart).
Western Australia seems to be at the forefront of the mining investment cliff, as shown by the below chart showing activity peaking in mid-2012 (see next chart).
Based on the ABS’ figures, it won’t be long before mining investment begins detracting from Australia’s GDP growth and employment.
