Outlook is bright for resources and energy sectors in Australia

by Ray Clancy on April 11, 2016

in General Information, Jobs in Australia

In recent times a lot has been written about Australia’s resources and energy sectors and whether they can continue to provide jobs as the economy has slowed.

However, the latest Resources and Energy Quarterly from the Chief Economist of the Department of Industry, Innovation and Science covering the first three months of 2016 has again highlighted the positive outlook for Australia’s resources and energy sectors over the medium to long term.

This is good news for skilled overseas workers who are interested in jobs in the resources and energy sectors in the country. The report says that the sectors account for around 10% of Australia’s economy and employ more than 300,000 and despite current challenges, mining sector employment is still more than twice the size today than it was before the mining boom.

mining-energy-resources

This significant contribution to Australia’s economy is set to increase as Australia’s resource and energy export earnings are projected to grow by 30% to $208 billion in real terms between 2015/2016 and 2020/2021.

Notably, Liquefied Natural Gas (LNG) export earnings are expected to increase by around 150% to $42 billion. Further, iron ore export earnings are expected to increase by 29% to $72 billion. At 926 million tonnes in 2021, this will account for 58% of global iron ore trade.

While acknowledging that current challenges remain, the report highlights that consumption of most commodities is projected to increase, particularly as Asian economies urbanise. More broadly, an estimated 455 million people across the world, the equivalent of the combined populations of the United States and Japan, are projected to migrate to cities over the next five years fuelling demand for energy and hard commodities.

Josh Frydenburg, Minister for Resources, Energy and Northern Australia, pointed out that India will be central to this growth story. Currently, India’s steel demand is less than a fifth per person compared to demand from OECD countries. Further, electricity use is one third per person of the global average and 240 million Indians do not have access to electricity.

This is expected to dramatically change with annual growth of 7.7% over the medium term and a commitment from the Indian Government to supply all villages with 24 hour access to electricity within the next five years. This is expected to help India’s thermal coal imports increase by around six per cent and LNG imports increase by around 19% respectively, each year, over the medium term.

“In the face of softer commodity prices, a lot of hard work has been undertaken to increase the competitiveness of Australia’s energy and resources sectors and this should be acknowledged,” he said.

“Innovation plays an important role here with research and development expenditure by resources and energy companies accounting for around 15% of all such expenditure in Australia,” he explained.

“As a result, we are seeing autonomous drills, trucks, and underwater vehicles being deployed on many Australian sites. Importantly, labour productivity increased by 33% for the sector over the last two financial years,” he added.

“Boosting productivity has helped to ensure that Australia maintains our competitive edge through this challenging period. With commodity demand set to increase in the medium to long term, the outlook for these great Australian sectors continues to look bright,” he concluded.

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