Health projects and roads protect states from economic pain

HEALTH projects in Queensland and roads in New South Wales are protecting the states from a rough economic landing, according to Deloitte Access Economics, as mining investment falters.

The dollars being pumped into the economy from the resources sector is now at its lowest level since 2009.

The total value of projects working their way through the pipeline to construction and beyond is 5.7% lower than it was 12 months ago, falling to $873.7 billion.

For the first time in 10 years, this figure has fallen for the three quarters - or nine months - in a row.

Deloitte suspects this could encourage other industries, long over-shadowed by torrents of mining investment, to finally thrive.

However, with the report titled The Trouble With Transition, that optimism is tempered with a heavy dose of caution.

This is not to downplay the spending on oil, gas and coal projects in Queensland and NSW, which is still sizeable.

Queensland and West Australia have the most valuable range of new major projects in the country, thanks to their resources base.

BHP Billiton Mitsubishi Alliance and Anglo American are in the midst of building billion coalmines in Central Queensland worth a combined $5.9 billion, not to mention $58.8 billion to build three projects near Gladstone.

NSW too has more than $3 billion in coalmines under construction.

Beyond resources, Queensland is benefiting from a growing population which is driving construction on two hospitals worth a combined $3.2 billion, led by the Sunshine Coast University Hospital.

In NSW, this non-resources funding flows from vows made by the Coalition government to supply new infrastructure, with much of this bound for road upgrades in western Sydney.

Deloitte warns the long-awaited peak of mining investment may have now "come and gone".

"It is clear that the investment in the resources sector, which has underpinned growth for the best part of a decade is fading," the report said.

"The economy will be relying on a more broad-based growth profile in the years ahead."

"It remains less clear" which industries will do the heavy lifting as spending on resources continues to slow.


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