This time last year when Aspermont –ILN’ publisher – and GE Capital joined forces to survey the mining and construction industries, the world was just emerging from the global financial crisis.
Even then miners were quite upbeat. Back then, most (81%) believed the situation had stabilised, 13% believed it was on the rise and only 6% felt things were getting worse.
Interestingly only 43% of the 2010 respondents felt that business conditions would improve.
However, 51% felt they would stay the same – the difference being that this same was a lot better than the same of a year ago.
The main reasons cited for improvement or stability of business conditions included improved business conditions, increased business activity and strong overseas markets.
The resources super-profits tax – the survey was conducted before former Prime Minister Kevin Rudd tearfully bade the top job farewell – proved to be a particular bugbear.
Only 3% of respondents supported the RSPT while 74% opposed it. The main reasons cited for opposition were its poor design, that it would threaten projects and investment, would reduce profits, was too retrospective and was just plain no good for business.
The majority (59%) said the announcement of the RSPT had an impact on their business, with 35% saying it had caused their business to slow down and the same amount saying it had put projects on hold.
The majority of mining respondents – 63% – are still feeling the GFC’s effects. Of those, it was evenly split between those suffering slight, moderate and significant impacts.
There were a variety of ways these impacts were being felt. These included 21% saying projects had been delayed, 18% experiencing decreased consumer confidence, 18% facing fallen commodity prices and 14% noting decreased lending opportunities.
However, the majority of mining respondents – 80% – felt the market had either stabilised or turned around, while 17% felt it had retreated further.
So what does the next year hold?
Staffing issues are again a major concern. Finance and cash flow loom as major issues too. Government red tape, market conditions and sourcing new business also copped a mention.
It is not all doom and gloom though. A quarter of respondents cited market stability and growth, 21% believe strong overseas demand and 16% reckon rising commodity prices are all in their futures.
All respondents believed the government should be helping the mining industry. Offering tax incentives was the most popular response with 31% offering that as a solution.
Cutting red tape and providing general support drew favour from 23% of respondents in both cases.
They also felt the mining industry contributed to Australia avoiding a recession in the dark days of the crisis. The main reasons for these answers were that the industry had continued to contribute to the economy (29%) and that mining provided much needed employment (26%).
Other responses included that mining survived the downturn well (16%), kept government coffers topped up (11%), there was overseas demand for resources (10%) and handy revenue from exports (8%).
As most businesses are still feeling the GFC’s bite, respondents were asked what actions they had taken to address the challenges of 2010.
Getting new business was the most popular response, with 27% saying that was how they were going about things. A quarter also nominated staff training and upskilling as their main response.
Other responses included restructuring (12%), exploring opportunities overseas (12%), increasing production (10%) and freeing up cash flow within the business (7%).
Only 7% of respondents opted to take no action. This could be interpreted as them being part of the group that believes the worst of the GFC has passed them by.
Looking forward, 44% of miners felt staffing issues would be the bane of their operations.
For another 28%, finance and cash flow are expected to be their biggest challenge.
Government restrictions (15%), market conditions (10%) and finding new business (3%) also were nominated as major concerns.