Top 3 predictions for 2017
Having been involved in recruiting within the Mining and Oil and Gas markets for over 10 years, we have seen a huge shift in the amount of investment in the industry from 2015 to now.
More recently, we have been hearing from many of our clients that things may be changing for the better and we may be on the cusp of a resurgence.
The top 3 trends we are seeing are:
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Iron ore is nearing $80 a tonne. This is up nearly 50% since June and has meant that we are back in the profitable territory on companies investing in new expansions and productions. The upturn was apparent last year and it would seem that it's still making gains. This would suggest that WA could start to see more Greenfield Remote Iron Ore projects which are good news for the Construction companies hit by the downturn in LNG and Resources. It’s expected to show in terms of employment early next year but unlikely to return to the boom levels.
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Capital improvements which have been stalled for the last 3 years are coming back online. During the resources “recession”, much of the focus has been on maximising efficiencies on existing operations and many capital improvements and extensions have taken a back seat. With the increase in prices and promising signs of demand, we are seeing a number of new enquiries and tenders from backdated projects. If this comes on line at the same time as the greenfield projects are likely to spark a surge in jobs especially for remote tradesmen. These trends will be in WA and Queensland.
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The lower labour costs have returned from the peak of 2015. Most companies are paying nearly 30% less for their staff at all levels. Uplifts for remote work has also moved back to an average of 20% which is back from nearly 35% during the boom.These lower labour costs means that the costs of expansion and execution have come down considerably as well as the ability to attract Australian based high-quality staff which means that there are many benefits in investment over the next year or two.
Overall, we are optimistic in terms of growth in employment, but we are at the early stages. These new projects won't convert into construction and job growth until 2018 but it has to start somewhere and all the signs are looking positive.
In the meantime, much of the resources are being taken up by the major infrastructure projects in NSW and Victoria. Approximately 2500 people per month are moving from WA over to the Eastern States to keep employment but this may change once resources start to invest again.