Mining accounted for less than 10% of GDP last quarter for the first time since 2015 and with mining firms not responding to soaring commodity prices with higher investment, that decline has further to run. Indeed, we think that efforts to decarbonise the global economy will result in mining’s share of output falling to 5% by 2050. While Australia is well placed to cope with lower export revenue, a shrinking mining sector will be a drag on productivity. As such, the incoming Labor government has its work cut out to improve the long-run prospects for the economy.
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