2016 As The Turning Point Of Australia’s Mining Sector

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With less than two months to go, it appears that 2016 will be the turning point of Australia’s mining industry. The downturn in capital investment seems to be nearing its end with commodity prices recovering and signs of improvement in non-mining infrastructure investments. This is welcome news for an economy that is dependent on the mining industry.

Increased infrastructure investments and reforms in Australia’s industrial sector have benefit from China’s reforms. Most of the turnaround in commodity prices and mining sector activities are courtesy of China because of the increased infrastructure investment this year. These is clearly a case of Australia benefiting from Chinese reforms like the specific attempts of China’s policy makers to reduce overcapacity in its coal sector. At first, it was assumed that slow growth in Chinese productive would negatively affect Australia, but this was not clearly the case.

Australia is the lowest cost producer of high grade commodities and Chinese demand for iron ore remains as strong as ever. However, there are concerns whether Chinese demand for raw materials will last because of the recent outlook for China’s residential property market. Recent measures have attempted to curb excessive price growth in certain major cities.

Based on the monthly business survey made by National Australia Bank the downturn in the mining sector is nearing its end. While prices are still below the past peaks, a turnaround in 2016 has been noticeable particularly in the spot prices of coking coal. The most recent price gains are high frequency indicators of the economy.

A recent NAB survey also showed increasing business confidence in mining and improved trust in WA. It is very likely that further gains will be achieved in the recovery of confidence towards mining. Adding further weight to the increasing confidence is the pickup in hiring in the sector.

Aside from the mining sector, other businesses are becoming more profitable. There is great demand for Commercial Cleaner in Gold Coast because of the increasing need for tidy and well maintained offices and reception areas. With hard work and dedication, professional cleaning will provide a business with a good image.

 

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