Say it isn’t so

OK, TH heard some protestations from Mr Kilmartin. Something like:

(thanks RPL)

Followed by

Apparently his point is that mining only makes a small contribution to the Aussie economy (less than 10% of trade GDP).  And he would be right. Here is the chart.

Source: ABS

The only thing that TH would add is that based on the ABS statistics, mining looks to be about as important now as manufacturing. So saying that mining is not important is like saying that manufacturing is not.

Sorry TH is a bit pressed for time so he wont elaborate on the employment and other elements of mining’s contribution, except to add that with respect to investment it is big, but Hume suspects that Mr Kilmartin knows that already. Perhaps DK will add a comment.

 

2 thoughts on “Say it isn’t so

  1. Hang on. Re other elements of mining’s contribution, to say that “mining only makes a small contribution to the Aussie economy (less than 10% of GDP)” is true in the direct sense, but how about the indirect sense? No doubt a fair bit of that big purple slice called “services” is mining-related (engineering, etc.). Does all that get netted out in calculating the final value added of mining (since much of it is probably input costs)? I’m not a master of the national accounts, but my hunch would be no.

    So it would probably be more accurate to say that mining contributes at least 10% of Australia’s GDP, and probably more.

    TH, keep the river flowing.

  2. Hi jfrene, appreciate the comment. Thanks.
    Whether the services sector includes services related to mining is a good question. The answer is almost certainly yes, but without delving further into the stats its hard to know exactly how much. Some services would have already been included. For example, if a firm provided consulting services related to how to extracting ore from a a particular mine, that service would almost certainly be included in the value added of the mining industry. Whereas a firm that builds equipment that is used by a mining company, would be included in manufacturing (it is producing a capital good that is a final good).

    As I recall, construction is where the most difficulty lies when it comes to distinguishing between mining and other activities, because some construction activity is mining related — say, building a the houses at Olympic Dam to house the miners — but is probably measured as construction.

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