Is the Australian economy changing shape?

by Mark Benson on July 7, 2013

in Money, Business and Finance

Is the Australian economy changing shape?

Is the Australian economy changing shape?

Over the last decade or so the Australian economy has been dominated by natural resources, and in particular mining companies, which have been behind the ongoing growth. We are seeing the introduction of multibillion dollar mining, oil and gas projects which have assisted in pushing the Australian economy forward and bringing unemployment down to record lows. However, amid signs that the mining boom may well start to fizzle out in the short to medium term, is the shape of the Australian economy starting to change?

The influence of mining companies

Even though there are signs of a slowdown in the mining industry in Australia the fact remains that this industry will remain very influential in the short, medium and longer term. We are seeing a record number of skilled workers moving to Australia to fill various skills gap in the mining industry and while this influx of individuals from overseas will start to slow, they will still be required for the immediate future.

Even if it turns out that the mining industries assisted in stopping the Australian economy going into recession after the 2008 US mortgage debacle, surely this was a fair price to pay?

Government investment

The Australian government has been very proactive in the region of new technology and education over the last 20 years or so. While the mining and natural resources industries continue to grab the headlines, significant progress has been made with regards to new technology sectors across the country. It is also worth noting that the government is currently undertaking a massive multibillion dollar broadband expansion in Australia which will bring many individuals and businesses into the cyber fold.

Quote from AustraliaForum.com : “Whether directly, or indirectly, have you ever invested money into the Australian stock market?”

Manufacturing

As in many developed and developing countries, the manufacturing sector in Australia has come under significant pressure over the last decade or so. A short-term weakening of the Australian dollar has assisted those operating in the export industry but to all intents and purposes this is a shrinking part of the economy. This is perhaps one of the major reasons why the government has been investing in technology and education, as a means of offsetting the impact of the reduced size of the manufacturing sector.

New technology

The Internet, broadband, innovation, telecommunications and an array of other new technologies are now starting to have an impact upon the Australian economy. It is also worth noting that the government has introduced an array of new relationships with the likes of the Indian government which will see skills and ideas shared between the two countries. The reality is that no economy should ever standstill and any government which does not plan ahead for a shift in economic powers is doing an injustice to the population.

The future

There is hope that, while the mining industry in particular is showing signs of a slowdown at the moment, we still have a number of large projects in the pipeline up to at least 2015. So, while there are some concerns about short-term employment opportunities in the mining industry, these should not be overdone when you bear in mind the major projects coming online in the short to medium term.

It is also worth noting that the government’s ongoing investment in new technology, innovation and education has put Australia on the map. These are areas which will only grow in the future and bring about an array of new employment opportunities. Those who write off Australia as a one trick economic pony may well live to regret their thoughts!

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