Australian resources sector expands in 2018

Australia's resources sector expanded by 6.7pc by economic value in 2018, with it the second-largest contributor to Australia's economic growth of 2.3pc last year. The increase came from record LNG and iron ore exports, as well as higher coal prices.

The resources sector accounted for 7.8pc of Australia's gross domestic product (GDP) in 2018, which totalled A$1.84 trillion ($1.32 trillion), up from an average of 7.6pc in 2016. This represented the largest proportion of the Australian economy since 1975 when official data was first collated on the industry sector contribution to economic growth, according to the Australian Bureau of Statistics (ABS).

Australia's resource sector is dominated by its export trade, with the country's being the world's largest exporter of iron ore and hard coking coal and the second-largest exporter of thermal coal and LNG.

The resources sector expanded by 1.2pc during October-December, in a period when Australia's GDP rose by 0.2pc, according to the ABS.

The expansion of the resources sector in the latest quarter was driven by the oil and gas sector, which rose by 7.7pc during October-December. It was boosted by the start-up of the two production trains at the 8.9mn t/yr Ichthys LNG venture that extracts gas from fields in the Browse basin offshore Western Australia.

The total economic contribution of the resources sector was A$144bn in 2018 and represents a rise of 2.6 times since 2009, over which time LNG exports have more than tripled and iron ore exports have risen by a similar level.

The resources sector also posted record profitability in 2018. But capital expenditure dropped to an 11-year low last year as many of the resource projects have come on line that led to the higher production and exports.