Reduced demand for natural resources means that Australia’s economy will grow by just 2% in 2013, according to Ian Stone, managing partner of consulting firm Nexia Australia, which is part of Nexia International, a worldwide network of independent accounting and consulting firm. Mr Stone said that companies operating in Australia's mining industry will have to look beyond their traditional partners in Asia-Pacific to grow their businesses. The country experienced a mining boom in 2012, when in Queensland alone the value of the resources sector grew from $22.8bn in 2000 to $36.5bn, according to Brisbane Marketing. However, Mr Stone maintained that a significant reduction in demand from some of Australia’s partners in Asia-Pacific means that the country's resources boom is over.

“Australia’s growth has reduced because strong demand for its natural resources from India and China [predicted in 2012] has not materialised,” said Mr Stone. “In the past 12 months, the demand for Australia's resources has [weakened] due to overseas customers re-negotiating a lot of pricing and orders being cancelled. China, in particular, has reduced its iron and steel requirements, due to infrastructure projects not proceeding. With demand for Australia's resources decreasing there are a lot of expansion projects originally planned by many mining companies in the country that have been put on the backburner. The government had originally planned for a surplus this year, and now it has just announced that this will not occur. So I would anticipate that the economy will struggle to grow and it will probably [experience] about 2% [growth this year].” 

Advertisement

Even though several economies in Asia are expected to grow more than the global average of 3.6% predicted by the International Monetary Fund, several Asian countries are still reducing their demand for natural resources, to cope with global headwinds. “North Asia will grow by about 7%; south Asia will be slightly slower at 6%; south-east Asia will grow by 5%,” said Henry Tan, director of Nexia China.

According to Mr Stone, the reduced demand from these countries means that Australian businesses will increasingly recognise the need to diversify their partners through seeking opportunities beyond the region. “A lot of companies in Australia are saying they have to start thinking of how to grow their business, and they are looking to reinvent themselves,” said Mr Stone. “They might not see Asia-Pacific as the potential gold mine they thought it was, [and] they could look to go into Europe and South America. [Although] Asia-Pacific is the logical partner because it is [geographically] close, and it has a large population, they do not think it will be the bucket of gold that it was a few years ago.”