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

Vanessa Rayner and James Bishop
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Vanessa Rayner: Reserve Bank of Australia

RBA Research Discussion Papers from 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.

Keywords: resource boom; industry analysis; input-output tables (search for similar items in EconPapers)
JEL-codes: D57 E01 Q33 (search for similar items in EconPapers)
Date: 2013-02
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Citations: View citations in EconPapers (32)

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