Mining sector capital investment has been increasing in WA but falling in Queensland, according to March quarter capital expenditure data published by the ABS yesterday (see chart above). This would reflect a combination of the following factors:

• the stronger demand and higher prices we’ve seen for iron ore which is mined in WA;
• the weaker demand and lower prices for coal which we mine a lot of in Queensland; and
• a Queensland state government which is internally divided on the desirability of coal mining and hasn’t made it easy to get new mining projects up and running.

Overall, the private sector capital expenditure data are discouraging for Queensland. Nationwide CAPEX was up 6.3% in March quarter but it was down 0.4% in Queensland. While Queensland has so far had a superior recovery to the rest of Australia from the COVID recession, there is now a risk we’ll fall behind other states.

Of course, the COVID outbreak and lockdown in Victoria should mean we’ll continue to outperform Victoria at least. What an absolute debacle. We needed to get as many Australians vaccinated by Winter as possible and we failed miserably. Our federal and state governments have really let us down. They have failed to grasp the magnitude of the challenge and to act with the necessary urgency and vigour. The result is that Victorians are once again locked down, interstate travel is restricted, and people in other states must now be worried about lockdowns being imposed upon them. It’s looking like it could be a dreadful Winter.

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