Australia’s “two-speed economy” features a dynamic mining and energy sector, contrasted to flagging retail and manufacturing business. Heritage consulting firms in Australia continue to flourish through providing heritage management services for mining and energy developments throughout the country.
According to current Australian Government budget projections, “following growth of 34% in resources investment in 2010‑11, resources companies expect to increase their capital expenditure by a further 74% in 2011‑12, supporting a strong outlook for commodity exports and activity in the related construction and services sectors.” The growth of resources sector investment in Australia for the 2011 calendar year is reported at $450 billion.
Western Australia has the highest value and fastest growth, particularly in iron ore, petroleum and natural gas. The value of Western Australia’s mineral and petroleum industry reached a record high of $101.2 billion in 2010–11 representing an increase of 39 per cent over the previous year. This amounted to nearly 57% of Australia’s total output of minerals and energy, as a major provider of these commodities on the world stage. However, minerals and energy products constituted 95% of Western Australia’s Merchandise Exports in 2010-11, illustrating the dominance of this sector of the economy. The fastest growth continues to be in the Pilbara region in the north-west of Western Australia, featuring hundreds of billions of dollars of iron ore and natural gas resource projects. Read more…
In October of 2011, Charles Mount blogged about the correlation of construction output and archaeological licences in Ireland. The correlation was such that you could predict with some confidence, either licences or construction output, from the other. Clever, but what drives the Canadian CRM industry?
Unfortunately, as pointed out recently in HBJ by Christopher Dore (17 February 2012), there is no North American Industry Classification System (NAICS) code for CRM archaeology and there are no country wide statistics on archaeological activity in Canada. Hence begins the quest for drivers for the Canadian CRM industry.
Initial speculation was that price of oil was a significant driver in the archaeological economies of Alberta and Saskatchewan. Both provinces have growing and diverse economies, but the petroleum industry is an important component of the economy. There is no single price of oil, but the New York Mercantile Exchange (NYMEX) produced a nice online summary of the price of light, sweet crude. Saskatchewan has both light and heavy crude. For this analysis I looked at the maximum weekly price for the year, the minimum weekly price for the year, and the closing price during the last week of the year.
Next I looked at the number of archaeological permits issued by Alberta and Saskatchewan between 2008 and 2011. There are a few differences in the numbers and types of permits that both provinces issue, but these are not material to the analysis. Overall for this time period, there was a sharp decline in 2009 with a slow recovery in 2010 and 2011.
The number of permits appears to be well correlated with the maximum price of oil (permits and oil prices are normalized to a maximum value of 100). Permits also correlated with the minimum and December close, however for the latter two, the price of oil leads the number of permits by a year. So the minimum price of oil sharply declined in 2008, the year with the highest price, but the decline in permits took place in 2009.
Does this make sense? It does. There is a base price to drill and if the price of oil is too low, it is better to scale back production until prices rise. My prediction is that given the high December closing price, the number of archaeological permits will increase in 2012.
What about other provinces? I am collecting data but I am curious what others think are the prime economic drivers of their regions.