The recent capex and exploration expectations data suggest that mining investment may be approaching a turning point. A decline is inevitable: the question is when and how fast.
On the basis of past engineering construction commencements, there are reasons to believe that there is a risk of a decline in 2014 big enough to take 2% points off GDP growth in that year unless another “mega” project starts soon. Lower levels of bulk commodity prices are also likely to be positive for the underlying trend in mining project commencements.
Any sharp decline in mining investment in 2014 would be highly detrimental to growth without an offset. Some of that will come from increased mining exports as new projects continue to come on stream. However, employment is likely to struggle unless non-mining investment fills the breach.