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

Author

Listed:
  • Vanessa Rayner

    (Reserve Bank of Australia)

  • James Bishop

    (Reserve Bank of Australia)

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.

Suggested Citation

  • Vanessa Rayner & James Bishop, 2013. "Industry Dimensions of the Resource Boom: An Input-Output Analysis," RBA Research Discussion Papers rdp2013-02, Reserve Bank of Australia.
    • Handle: RePEc:rba:rbardp:rdp2013-02
    as

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    References listed on IDEAS

    as
    1. Ellis Connolly & David Orsmond, 2011. "The Mining Industry: From Bust to Boom," RBA Research Discussion Papers rdp2011-08, Reserve Bank of Australia.
    2. Christian Gillitzer & Jonathan Kearns, 2005. "Long-term Patterns in Australia’s Terms of Trade," RBA Research Discussion Papers rdp2005-01, Reserve Bank of Australia.
    3. Ellis Connolly & David Orsmond, 2011. "The Mining Industry: From Bust to Boom," RBA Annual Conference Volume (Discontinued), in: Hugo Gerard & Jonathan Kearns (ed.),The Australian Economy in the 2000s, Reserve Bank of Australia.
    4. Michael Plumb & Christopher Kent & James Bishop, 2013. "Implications for the Australian Economy of Strong Growth in Asia," RBA Research Discussion Papers rdp2013-03, Reserve Bank of Australia.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    resource boom; industry analysis; input-output tables;
    All these keywords.

    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)

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