Figures released yesterday by the Department of Industry and Science showed that mining sector employment dropped 13% year-on-year to 229,156 people in the June quarter.
The report blamed cost-cutting as well as the consolidation and reduction of service contracts.
“Mining sector employment is not expected to rebound in the short term as a fall in construction labour, associated with declining capital expenditure, is likely to fully offset any increases in employment associated with rising production,” the Resources and Energy Quarterly – June Quarter 2015 said.
Australia’s resources and energy export earnings are forecast to have dropped 11% in the 2015 financial year to $A174 billion.
Iron ore prices, which are down 27% over the year, are the biggest factor in the reduction.
“Over the short-term, export volumes are forecast to increase for most commodities however softening commodity prices will weigh on export earnings,” chief economist Mark Cully said.
Export earnings are set to increase by 2.2% in the 2016 financial year to $178 billion, thanks to rising LNG exports and a weaker Australian dollar.
Despite the iron ore price slump, exports are expected to increase by 4% in calendar year 2015 to 718 million tonnes as the Roy Hill mine comes online later in the year.
Industry wide capital expenditure fell by 13% year-on-year in the March quarter and 22% quarter-on-quarter to $17 billion.
As producers shift from investment to a focus on productivity, capital expenditure is expected to fall further.
“It is worth noting that the downturn in investment activity has come from a historically high base and there are still a number of substantial projects in the resource and energy development pipeline,” the report said.
Exploration expenditure was down 9% year-on-year in the March quarter to $1.3 billion driven by a 22% slump in exploration year-on-year.
“Exploration at existing deposits fell 21% in the March quarter 2015 (year-on-year) and exploration at new deposits fell 25%,” the report said.
“Exploration expenditure fell in every state and territory in the March quarter (year-on-year), led by Queensland which recorded a 47% fall to $53 million, Western Australia which fell 11% to $184 million and South Australia which fell by 13% to $22 million.”