Mining is set to take a back-seat to other residential growth drivers in 2013, according to a leading research group.
Within the next two years, growth in mining ‘will continue’ but at a moderate pace, claims BIS Shrapnel’s Long Term Forecasts 2012-2027 report, with other non-mining and residential investments set to take over.
Residential and non-mining business investments have declined, however both of these industries are set to drive the next economic growth stage.
“Residential investment, triggered by recent interest rate falls, should start growing from late this year, driven by the dwellings shortage that has developed. And non-mining business investment, currently below levels required to underwrite even moderate demand, will recover as interest rate reductions over the past year support demand and capacity constraints emerge,” said senior economist at BIS Shrapnel, Tim Hampton.
Population growth, largely due to immigration rebounds, and average employment and wages growth, will help support household expenditure.
However, large parts of the economy do remain depressed, he said, with a high dollar driving change, and expected delays to recovery coming from an understated threat in Europe.
“This would likely further delay the recovery in dwelling and non-mining business investment,” he said.