Many regions benefit from mining boom: RBA

9 Oct 2012, 3:54 pm   -   Source: AAP
(File: AAP)

(File: AAP)

Australia's mining boom has had a positive effect on employment in regions well away from the mining states of Queensland and West Australia.

The mining boom has helped create jobs well away from Queensland's coal mines at West Australia's iron ore deposits, the Reserve Bank of Australia says.

RBA deputy governor Dr Philip Lowe says demand for workers in the mining sector has had a positive effect on the employment rate nationwide.

Even though industries like manufacturing and construction had struggled in recent years, there had been relatively little variation in the unemployment rate across the country, he said.

Half of Australia's 68 regions have an unemployment rate of below five per cent, he said, while only three had an unemployment rate of above eight per cent.

"The overall impression from the various facts and figures is that the labour market has coped reasonably well with the significant changes taking place in the Australian economy," Dr Lowe told a conference in Hobart.

Australia's national unemployment rate is currently sitting at 5.1 per cent, although the RBA believes the jobs market has weakened recently.

Dr Lowe said the rise of a fly-in, fly-out workforce for the mines had helped keep the unemployment rate low in a number of regions.

Meanwhile, changes to the industrial relations system meant the Australian workforce was more flexible than it was 20 years ago, he said.

However, with investment in Australia's resources sector expected to peak in 2013, underperforming sectors like construction will need to pick up in order to maintain the strength of the Australian jobs market, he said.

JP Morgan economist Ben Jarman suggested that labour force trends were an important factor for the RBA in its decision to cut the cash rate last week, given concerns about falling participation rate - the number of people employed or actively seeking work.

In the last labour force data for August, the participation rate was at 65.0 per cent, down from 65.2 per cent in July.

"The unemployment rate has only stayed low because of a fall in participation," Mr Jarman said.

"Dr Lowe points to the construction sector as a possible driver of falling participation, given that this sector has seen particularly large falls from those formerly classified as self-employed.

"These individuals are of course available for work, but would not necessarily classify themselves as unemployed when out of work."

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