PERTH (miningweekly.com) – Advisory firm Deloitte predicted on Thursday that investment in major Australian resources projects would peak in the next 12 months, after which the baton would be passed on to other sectors of the economy.
In its March issue of the Investment Monitor, Deloitte reported that the total value of projects in the database decreased by some A$24.7-billion to A$928.9-billion, a 2.6% fall from the December quarter.
The value of definite projects, however, increased by 1.5% to A$451.5-billion. However, Deloitte noted that this was only marginally above the value of definite projects at the same time last year, with the gains over the March quarter offset by losses through the course of 2012.
Large liquefied natural gas (LNG) projects continued to dominate the investment programme of oil and gas projects under way, with a value in excess of some A$200-billion.
However, Deloitte noted that the pipeline of projects where final investment decisions were expected shortly contained fewer projects of a large scale and a number of resources companies have pulled back on their expansion plans through 2012.
Deloitte noted that the value of planned projects in the entire database also fell by some 6.2%, or A$31.4-billion, from the December quarter.
“There is potential to see some growth out of areas of infrastructure investment over the next few years,” the advisory firm said.
“That is particularly true for those areas of infrastructure that will play a supporting role to lift mining production, including railways, port projects and electricity. That said, other elements of infrastructure look more like tracking steady than achieving much growth.”
Deloitte warned that Western Australia, Queensland and the Northern Territory had potentially the most to lose from the investment pattern change, having taken the lion’s share of resources investment.
However, the firm noted that it was also true that the likely stronger growing components of investment over the next few years would still likely be led by the west and north, linking in to expanding resources production.
“That is unlikely to be enough to fully compensate for a swing down in mining investment, but it will provide some offset,” Deloitte reported.