The great unwinding of the once-in-a-century mining boom may finally be coming to an end in Australia as recent figures show that job vacancies across the sector — a top economic indicator on employment growth — are beginning to rise.
According to data supplied to Business Insider by economists at the Commonwealth Bank, the coal sector is — not surprisingly — leading the way. Most of these positions, however, are temporary jobs.
“Whether this translates to a lift in permanent positions will likely be determined by future movements in the Australian dollar and commodity prices,” Michael Workman, senior economist at the CBA told the Insider.
The news comes as an ongoing and sharp increase in coal prices has began triggering a series of mine reopenings, particularly in Queensland and New South Wales.
Prices for coking coal price — the steelmaking kind — recently reached $230 a tonne, up from $75 a tonne just a few months ago. And thermal coal, used in power generation, has doubled to more than $100 a tonne last week, up 27% just since the start of October.
Mining investment in Australia, the world’s second-biggest coal exporter, accounted for around two-thirds of the county’s economic growth between 2011 and 2012. That was when investment was at its peak and represented around 8% of Gross Domestic Product (GDP) compared to 4.25% currently.
CBA experts believe the upturn in mining-related employment will add to the largely positive trend in job openings, leading to a positions growth able to keep mild downward pressure on Australia’s unemployment rate.
Experts at HSBC agree. In a recent report they wrote that the rally in coal prices could translate into a A$29bn (US$22bn) boost in the country’s export values, equivalent to 1.8% of nominal gross domestic product. Tax revenues and wage growth, which have both been under pressure during a five-year slide in commodity prices, should both receive a lift and help address a persistently low inflation rate, they noted.