Deloitte data suggests interest rates will cushion mining blow

LOW interest rates and a cooling of mining investment could drag New South Wales from the shadow of the global financial crisis while nudging Queensland ahead of Western Australia as the country's powerhouse state.

Data released by Deloitte Access Economics on Tuesday suggested that as mining investment petered out this year and next, low interest rates would cushion the blow.

And with the Reserve Bank not expected to change that any time soon, Deloitte Access suspects prospects will improve the two eastern states.

"Some good news is already being seen in NSW from lower interest rates," the report found.

"Building approvals have been moving up, and that should see some better news in housing construction which has been sick as a dog in this state for quite a while."

Large-scale infrastructure spending, too, will be of help.

These include the $2.1 billion South West Rail Link for Sydney that could take passengers from 2016 and the $1.7 billion upgrade to the Hunter Expressway due to be finished by year's end.

In Queensland, the austerity measures of the LNP Government last year are keeping confidence low, but that pain may soon pass.

Deloitte Access pointed to waning mining investment and government cuts contributing to Queensland losing its fight against WA for the title of "Australia's fastest growing state".

But the data also refers to optimism on the horizon as $60 billion in under-construction gas projects tick over near Gladstone, as do $7.5 billion in new construction for Central Queensland's Bowen Basin.

According to the report: "With the worst of Queensland's State Government cutbacks likely to be soon over, that may let the Sunshine State shrug off its cost-cutting coal miners to help it grab a stint at the top" as Australia's investment king.


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