In the past few months, there have been
several indicators of the falling amount of capital expenditure in the mining
sector in Australia, the best of which is the ANZ
major projects update, which forecasts reductions in the potential project
pipeline of about $115 billion compared to ANZ’s previous forecast in July 2012
for total major projects in the country, a large part of the fall being
attributable to mining and energy project delays or cancellations. There have
also been several secondary indicators of the slowdown of the sector - two
examples being poor
results from mining equipment manufacturers such as Caterpillar and earnings
guidance reductions and job cuts at the mining consultancy firm Coffey.
All of this, of course, only charts the
supply response of the Australian mining industry to weaker commodity prices so
far. What might happen to demand from China, and hence these prices going forward, is a whole other issue.
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