Buoyant mining sector shores up 'patchwork' Oz economy

The value of Australian mining contracts in 2010-11 rose to $57 billion. Photo / Thinkstock

The power of Australia's booming resources sector has been further underlined in a new report showing that mining is underwriting the nation's construction industry.

Contracts with miners eclipsed all other sectors in 2010-11, the latest annual Housing Industry Association (HIA)-Cordell Construction 100 report on the nation's 100 largest non-residential builders said.

Mining accounted for more than 46 per cent of all non-residential contracts written during the year - well ahead of the 16.2 per cent won by its closest rival, civil engineering.

"The [report] clearly reinforces that the mining sector is providing the sunshine for the Australian economy," HIA chief economist Harley Dale said.

The value of mining contracts won in 2010-11 almost doubled over the previous year, to A$44.5 billion ($57.1 billion).

But Dale said that while other sectors remained in the shade relative to mining, the value of contracts won in 2010-11 also increased substantially for commercial construction - up 68 per cent to A$10.2 billion - and multi-unit residential construction, which rose 57 per cent to A$8.4 billion. Industrial construction increased 54 per cent to A$5.6 billion.

The report reinforces continuing concern at Australia's "patchwork" economy, with mining vacuuming skills from the rest of the nation and strengthening the dollar.

Much of the nation's prosperity is concentrated on mining regions and those that support them, with such other sectors as manufacturing, tourism and retailing suffering.

Manufacturing's problems were underscored by BlueScope Steel's decision to shut down a key furnace, shed 1000 workers and abandon exporting.

Under rising pressure the Government last week convened forums on tax reform and employment, which produced ideas but little of substance.

Yesterday, as part of the carbon tax package passed by the House of Representatives, the Government promised A$300 million to help the struggling steel industry.

Supported by the Greens, the carbon tax and the steel transformation plan will pass through the Senate next month. The plan will provide A$180 million to BlueScope Steel in New South Wales, and A$120 million to OneSteel in South Australia.

The HIA-Cordell Construction report said the list of Australia's biggest non-residential builders was topped by Leighton Contractors.

It said that in a year when the value of non-residential construction increased by 10.4 per cent to A$116.9 billion, Leighton won contracts worth almost A$16 billion.

Dale said that during the year the largest 100 companies won contracts worth A$96.6 billion, a 25 per cent increase on 2009-10.