Industrial Impact of Commodity Price Shocks in Australia

Stephen J Knop and Joaquin Vespignani

MPRA Paper from University Library of Munich, Germany

Abstract: Commodity price shocks largely affect the mining, construction and manufacturing industries in Australia. However, the financial and insurance sector is found to be relatively unaffected. Mining industry profits and nominal output substantially increase in response to commodity price shocks. Construction output is also found to increase significantly, especially in response to a bulk commodities shock, as a result of increased demand for resource-related construction. Increased demand for construction has a positive spillover effect to parts of the manufacturing industry that supply the construction sector with intermediate inputs, such as the non-metallic mineral sub-industry. In contrast, other manufacturing sub-industries with only tenuous links to the resources sector such as textiles, clothing and other manufacturing, are relatively unresponsive to commodity price shocks

Keywords: Commodity prices; Commodity Shocks; Australian economy (search for similar items in EconPapers)
JEL-codes: E00 E02 Q4 Q43 (search for similar items in EconPapers)
Date: 2014-05-01
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