Australian mining sector and business confidence

The National Australia Bank Business Survey report makes particularly poor reading in regard to the mining industry.

The report states: “Mining confidence fell heavily for a second consecutive month in April, to -39 points, which was the weakest outcome in over four years. Weak mining sentiment probably reflects concern over the outlook for commodities demand…”

The backdrop to this is the Chinese economy. That country has been surging for some time now, but what goes up has a tendency to come down. It is a major consumer of Iron Ore from Australia but it also has its own supplies, to the extent that it produces some 75% of its own requirements. That means roughly one quarter of Chinese needs comes from Australia. In the event that there is a slowdown in demand it is not difficult to see which suppliers it will stop using first.

The mining executives who contributed to the NAB Business Survey report can be expected to have an unsurpassed knowledge of the situation on the ground.

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