Australia’s resources boom is still going strong with Reserve Bank governor Glenn Stevens saying that he sees no sign that it is over.
He noted that while the rate of resource investment might decline within a year or two, this would be offset by the rise in export shipments of resources.
Even if the rate declines, Australia already has US$270 billion committed capital investment construction under way at the moment while another US$500 billion is in the pipeline, half of which are at advanced stages of development.
Stevens noted that mining companies were already facing fierce competition for labour and capital, making it likely that some projects – like BHP Billiton’s now shelved US$20 billion Olympic Dam expansion – would not go ahead.
He said the economy was still growing at its potential and that other sectors like residential and non-residential construction, might start to pick up during the same period.
“Overall, growth is forecast still to be close to trend, albeit with a different composition from that seen in the past year or two, and inflation consistent with the target.”
Stevens’ comments come a day after Federal Resources and Energy Minister Martin Ferguson declared that the mining boom was over.
However, Prime Minister Julia Gillard said Ferguson was talking about commodity prices and that Australia would still be earning from resources exports for a long time to come.
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