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Mining welcomes weak dollar

Strong growth in exports, a weak Australian dollar and high world commodity prices offer a fillip for the capital intensive mining sector in WA.

This optimistic outlook follows the problem of business investment which has been the weak link in the WA economy in the past year, with capital spending – a major engine of the local economy – being particularly sluggish.

According to Challenge Bank’s Market Insights report, the value of business investment in WA in the December quarter fell by 9.4 per cent after rising by 9.1 per cent in the previous quarter.

The decline was driven by a 14.3 per cent fall in buildings and structures, while capital expenditure on plant and equipment fell by a lesser 7.4 per cent.

However, the outlook for investment is improving.

The Westpac/ACCI March Quarter Survey of Industrial Trends showed that manufacturers plan to significantly boost their spending on plant, equipment and buildings, while the current world economic situation augured well for the mining sector.

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