"This large drop in investment is the result of two records being set in the period – a record high for the value of projects being completed (A$30 billion) and the lowest value of new projects being sanctioned in the past decade (A$1.7 billion)"
- Bureau of Resources and Energy Economics
For months Oz economy has been experiencing a slowdown amid waning investment in the key mining sector. Moreover, politicians and policymakers have been trying to bolster growth in other sectors, like manufacturing or housing, to assure long-lasting prosperity. Some analysts, however, expressed their hopes the resource-rich economy would be able to benefit from mining sector in the future, as China gains momentum and demand for commodities is rising. Nevertheless, the value of mineral and energy projects developed in Australia plunged 10% over the last six months to about $240 billion. In contrast, the value of projects in April totalled $268 billion.
Earlier this month the Reserve Bank of Australia already said that investment in mining will decline from record levels seen in the past year, and they can even drop more than initially was expected. In 2015, however, there is a possibility of a rebound in resources and energy sector investment, as huge number of projects is expected to receive financial approval in that year.
During the last decade the Australian economy has grown beyond the pace of any other developed countries over the world, with mining sector fuelling growth. However, with waning investment, unemployment has risen to levels not seen since the peak of severe global financial crisis.
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