Study by UWA found 35 resource projects will create 22,000 jobs

13/11/96

A new study by the University of Western Australia has found that 35 resource projects currently committed or under construction in the State will create 22,000 new permanent jobs across a significant number of industry sectors.

The study has shown that 85 per cent of these jobs will be located outside of the resources industry.

The study, launched today by Resources Development Minister Colin Barnett, shows that the biggest gains from the current sustained growth in the resources industry are in areas such as education, health and welfare, the wholesale/retail sector and finance and business services.

The Economic Benefits from an expanding Minerals and Energy Industry study was conducted by the Economic Research Centre at UWA. It demonstrates the significant flow-on effects generated by investment in mining and mineral processing projects underway as at December 1995.

Launching the study for UWA and the Chamber of Minerals and Energy at ANI Engineering in Bassendean, Mr Barnett said a sample of 35 projects with a total value of $5.8 billion were considered.

They range in value from less than $100 million, to BHP's $1.5 billion hot briquetted iron project under construction at Port Hedland.

The study is part of a three year research program, Minerals East Asia and the WA Economy, being carried out by a team headed by Professor Ken Clements, Dean of the Faculty of Economics and Commerce at UWA, and funded by the Chamber of Mines and Energy.

Its first results statement was 'Multiplier Effects of the Western Mining and Mineral Processing Industries,' published in August, 1995. That effect was for every 100 people employed in the mining industry 300 were employed elsewhere, and for mineral processing the multiplier effect was even higher.

"This important study shows that many sectors of the WA economy are benefiting enormously from the sustained period of development the resources industry is currently experiencing," Mr Barnett said.

"The study shows that the initial benefits from the construction phase of major projects flow mainly to suppliers to the project.

"However, these benefits are dwarfed by the flow-on effects and the many permanent jobs created when the production phase begins and continues for the entire producing life of the project."

Mr Barnett said that the study found that the $5.8 billion of investment in the 35 projects was spread over an average 18 month construction period, giving an annualised investment of $3.6 billion a year.

The key features of the study show that:

·       the investment of $3.6 billion in a typical year of the construction phase creates approximately 39,000 new jobs in the WA economy;

·       additionally, when in production, these new projects create about 22,000 new jobs across the WA economy;

·       the new projects lead to a considerable expansion in gross state product and consumption;

·       retailers and other suppliers of materials and machinery expand the most during the construction phase;

·       all industry groups expand output and employment in response to the commencement of production. The largest increases in output occur in the mining and mineral processing sectors, however, the greatest increases in employment occur firstly in personal services and secondly in industries supplying goods and services to mineral projects;

·       during the production phase, all industry groups experience a growth in output but the employment benefits are even more widely dispersed; and

·       85 per cent of the jobs created during the production phase are located outside the mining and mineral processing industry with the biggest gains being in areas such as education, health and welfare, the wholesale/retail sector and finance and business services.

The study said that the investment in new minerals supply capacity had been stimulated by improvements in the international economic outlook and in Western Australia's competitiveness in areas such as energy supply.

"There is no doubt that the far-reaching reforms put into place in the WA energy sector by this Government continue to encourage significant investment in the resources industry, creating substantial flow-on effects as the UWA study has discovered," Mr Barnett said.

"This study is very encouraging news for the Government and industry, not only resource investors but support industries in WA in general and should bring confidence to the many sectors involved."

Media contact: Justine Whittome, (09) 222 9699