January 8, 2018 - Australia’s office of the chief economist is forecasting the country’s resources and energy exports to hit a record high of A$214 billion (US$167.6 billion) in 2017-18, before a decline thereafter.
The estimate was 1.6% higher than its September forecast due to higher iron ore and thermal and metallurgical coal prices, according to the department of industry, innovation and science's December Resources and Energy Quarterly.
However, the outlook for 2018-19 was revised 0.7% lower from previous estimates - to $200 billion - due to lower than expected iron ore export volumes as Chinese demand for steel softens.
"Australia's resources and energy export volumes are expected to continue to grow at a robust pace over the next two years, driven by LNG and, to a lesser extent, iron ore," it said.
The office also estimates that the mining services sector will increase its contribution to the economy.
It noted that Australia's GDP grew by 0.6% in the September 2017 quarter, with mining industry value-added growing by 1.1%.
"The mining industry directly accounted for 11% of the growth in Australia's GDP in the quarter. Oil and gas extraction and iron ore mining have been the largest contributors to mining industry value-added growth in the last two years, propelled by growing export volumes," the office said.
It added that the contribution of mining services to GDP was expected to grow in the coming quarters due to exploration activity incentives from a more supportive price environment for gold and base metals.
The Minerals Council of Australia said the 2017-18 figures showed the mining industry continued to drive economic growth and highlighted it as a global leader in innovation.
The council also noted the office saw increasing shipments of a number of Australia's principal resource exports contributing to another boom year for the country's minerals sector.
"This is great news for the Australian economy because a strong mining sector equals a strong economy," the MCA said.