Mining Boom About to Peak

The speculations continue that the mining boom is about to reach its peak.

Industry observers said that mining companies have started cutting down on their investment projects for the current financial year. According to the Australian Bureau of Statistics (ABS), some have even slashed their investments by as much as eight percent.

Dr. Shane Oliver said the recent trends may indicate that the mining boom is about to hit its peak. The AMP chief economist said this may happen sometime in 2013 and the mining industry is likely at closing to a peak.

Reports have indicated some mining companies have cancelled or delayed several large-scale mining projects. Companies have blamed cost blowouts and decline in commodity prices for the cancellation or postponements of projects.

According to the quarterly ABS survey, spending plans of the private sector have been slashed by some $5.9 billion for 2012/13.

The ABS survey added that the industry expects total capital expenditure to increase by some 11 percent. This is still lower than the initial projection of 21 percent growth for 2012/13.

The figure is also much lower than the actual 2011/12 growth of 30 percent.

The Reserve Bank, however, is hopeful that other sectors would start picking up to keep the national economy robust. It is setting its eyes on retail, manufacturing and housing.