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Construction is the next sector set to boom

FORGET mining, the next booming industry in the Australian economy will be much closer to home.
That’s according to CommSec chief economist Craig James, who said construction will pick up the baton from mining to become the driving force behind Australia’s economy in the next few years.
“Builders will hold the upper hand rather than miners,” said Mr James speaking at a media briefing in Sydney to release Commbank’s latest small and medium-sized enterprise confidence report.
While investment in the mining sector tripled in the four years since 2009, it’s now set to slow down as demand from China falters and Mr James expects residential construction will pick up the slack.
Multi-storey construction like that at Barangaroo is set to benefit all sectors of the ec
Multi-storey construction like that at Barangaroo is set to benefit all sectors of the economy. Source: Supplied
“We’re already starting to see that with things like home lending. If more loans are being taken out for the construction of houses and apartments you tend to expect that is going to translate into more building work happening. It’s the same in terms of council approvals to build new dwellings — they’re at record highs,” Mr James said.
He also busted the ‘myth’ that times are tough in Australia, as the economy has experienced 22 years of consecutive growth with inflation rates at 2.7 per cent.
Unemployment is at 5.8 per cent with companies holding a healthy amount of cash on the books.
A slowdown in China’s economy has implications for Australia’s mining sector. Pictured, C
A slowdown in China’s economy has implications for Australia’s mining sector. Pictured, Chinese workers in Beijing.Source: AFP
While construction might not pay the same six-figure salaries as mining, it could benefit more people.
“The builders get the money, the carpenters get the money all the people providing curtains and carpets and landscape gardeners and light fittings. You think about the whole process of building a home all these people are getting extra dollars and they’re able to spend that through the economy,” Mr James said.
“And it’s likely to be broader in context whereas mining is much more specific to certain parts of Australia...we are going to see a number of boats being lifted all at one time.”
But despite the slowdown it’s not all bad news. It could just be the end of days where people go to the Pilbara to “fill water bottles for workers and get paid $120,000 a year,” Mr James said.
“It’s by no means doom and gloom for mining services, it’s just different sorts of companies are going to get the benefit.”
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 The Queensland Government has released theenvironmental impact statement for the Kevin's Corner coal project.
It is now open for public comment.
Deputy premier Andrew Fraser stated that this massive $6.6 billion coal project by Gina Rinehart's Hancock Galilee will create long term job opportunities for the state.
"The development of the Galilee Basin as a major centre for coal mining, processing and export, is important to the future economic prosperity of Queensland," Fraser said.
"This proposed project has the potential to operate for at least 30 years and is a massive vote of confidence in central Queensland and the resource industry here.
"If the Kevin's Corner project proceeds, it could generate around 2500 jobs during the construction phase and another 1500 jobs during the life of the project. This is the public's opportunity to have a say on how this project might proceed and to raise issues they think may need to be addressed."
Kevin's Corner is a thermal coal project located adjacent to Hancock's Alpha Coal project.
"The project proposes to target thermal coal at depths suitable for both open cut and underground mining over the next three decades if it passes the strict environmental criteria.
"The combined open-cut and underground mine would potentially produce up to 30 million tonnes of thermal coal for the international market each year," Fraser said.
The Alpha and Kevin's Corner projects have a combined JORC compliant resource of 7.9 billion tonnes of coal, with ongoing drilling expected to increase these levels.
"If the project has its required approvals in place, construction could start as early as 2012 with the first shipment of coal anticipated in 2014."
It will ship coal through the Abbot Point Coal Terminal.
The project's EIS will be available for public comment until 12 December. 

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