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Industry Dimensions of the Resource Boom: An Input-Output Analysis

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  • Vanessa Rayner

    (Reserve Bank of Australia)

  • James Bishop

    (Reserve Bank of Australia)

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    Abstract

    This paper quantifies the links from demand for Australia's natural resources to activity in other domestic industries by using structural relationships embedded in input-output tables. Extending the methodology of Kouparitsas (2011), we estimate the size, growth rate, and industry value-added content of a broad measure of the 'resource economy', which is defined to include all final demand related to resource extraction and investment. Under certain productivity assumptions, we also estimate the amount of labour that is required by each industry to service the demand for Australia's natural resources. We estimate that the resource economy accounted for around 18 per cent of gross value added (GVA) in 2011/12, which is double its share of the economy in 2003/04. Of this, the resource extraction sector – which we define to include the mining industry and resource-specific manufacturing – directly accounted for 11½ per cent of GVA. The remaining 6½ per cent of GVA can be attributed to the value added of industries that provide inputs to resource extraction and investment, such as business services, construction, transport and manufacturing. This 'resource-related' activity is significantly more labour intensive than resource extraction, accounting for an estimated 6¾ per cent of total employment in 2011/12, compared with 3¼ per cent for the resource extraction sector.

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    Bibliographic Info

    Paper provided by Reserve Bank of Australia in its series RBA Research Discussion Papers with number rdp2013-02.

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    Date of creation: Feb 2013
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    Handle: RePEc:rba:rbardp:rdp2013-02

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    Keywords: resource boom; industry analysis; input-output tables;

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    References

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    1. Ellis Connolly & David Orsmond, 2011. "The Mining Industry: From Bust to Boom," RBA Annual Conference Volume, in: Hugo Gerard & Jonathan Kearns (ed.), The Australian Economy in the 2000s Reserve Bank of Australia.
    2. Ellis Connolly & David Orsmond, 2011. "The Mining Industry: From Bust to Boom," RBA Research Discussion Papers rdp2011-08, Reserve Bank of Australia.
    3. Christian Gillitzer & Jonathan Kearns, 2005. "Long-term Patterns in Australia’s Terms of Trade," RBA Research Discussion Papers rdp2005-01, Reserve Bank of Australia.
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    Cited by:
    1. Vespignani, Joaquin L. & Knop, Stephen J, 2014. "The sectorial impact of commodity price shocks in Australia," MPRA Paper 55435, University Library of Munich, Germany.
    2. Isaac Gross & James Hansen, 2013. "Reserves of Natural Resources in a Small Open Economy," RBA Research Discussion Papers rdp2013-14, Reserve Bank of Australia.
    3. Ivanova, Galina, 2014. "The mining industry in Queensland, Australia: Some regional development issues," Resources Policy, Elsevier, vol. 39(C), pages 101-114.

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