Mining and METS: engines of economic growth and prosperity for Australians

The mining sector has long made – and continues to make – a significant contribution to Australia’s economic growth and development. The Australian mining industry uses sophisticated production techniques and highly skilled labour to make the most of Australia’s comparative advantage in mineral endowments. The supporting activities of the mining equipment, technology and services (METS) sector add further to Australia’s national income and employment. The Australian economy continues to enjoy the fruits of the latest mining boom that began in 2003.

A sharp increase in commodity prices was followed by unprecedented investment in new mines, equipment and infrastructure – at its peak in 2012, resources investment accounted for 60% of total investment in Australia (including investment in both the mining and oil and gas sectors). This growth in mining capacity underpins the current production phase of the mining boom, in which rising export volumes support a range of manufacturing and service activities across Australia. Minerals and energy exports are the primary source of Australia’s export earnings, accounting for 64% of merchandise exports by value in 2015-16 (DIIS, 2016).

This report estimates the total economic contribution of the mining and METS sector to Australia’s gross domestic product (GDP) by using an input-output modelling framework in order to capture all mining and METS activities. This economic analysis applies a similar approach to the methodology used in the RBA’s 2013 Research Discussion Paper Industry Dimensions of the Resource Boom: An Input-Output Analysis. Overall, Deloitte Access Economics estimates that the direct economic contribution of mining and METS activities was $133.2 billion in value added in 2015-16, with 484,114 full-time equivalent (FTE) jobs directly supported by the sector.1 This figure represents the ‘economic footprint’ attributable directly to the mining and METS sector in the Australian economy.