Is It the End of the Mining Boom?

Industry observers say that the mining investment boom may end in the next two years. Deloitte Access Economics said the strong growth of the mining industry may not be sustained for more than two years.

The organization said the mining investment growth may start to decline soon. The bad news is that the decline may be sharper than expected. It added that there are fewer big mining projects underway and this can be a contributing factor.

Deloitte Access Economics is one of the country’s leading budget forecaster. It was established in 1988 by former Treasury economists.

Access, however, is quick to dampen worries saying its forecast does not pose immediate threat the Australian economy. According to Access director Chris Richardson, Treasurer Wayne Swan is facing some difficult points when he delivers the budget update this November.

Richardson added that if the forecast budget surplus is no longer present, the federal government has to decide whether implement cuts. These cuts, however, may hurt the economy.

Richardson also alluded the window dressing in the May budget, saying it was done to avoid hurting the government. But this can’t be repeated because it is just a band-aid solution. The carbon tax also implemented had little economic effect.

Treasurer Wayne Swan, meanwhile, praised the report and said that it is an endorsement of the strength of the Australian economy.

Swan also turned to Twitter to announce that the country just passed its 21st consecutive years of economic growth.