Economy needs mining: Analysts

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A series of financial reports has underlined the importance of mining to the national economy, with experts highlighting resources as the key to growth in most states.

In its quarterly Business Outlook report Deliotte Access Economics said while South Australia’s manufacturing sector was lagging mining was set to pick up the slack.

The report said the resources boom had a “shimmering” promise for SA but returns would not flow until around 2013-14.

It said the “bigger-than-Christmas potential” of the $30 billion Olympic Dam project would be “central to helping fill the pothole that has been left by some of the more traditional drivers”.

A recent report by global bank HSBC said while WA was facing a shrinking workforce the state was on track for its 21st year without a recession.

HSBC chief Australian economist Paul Bloxham the mining industry would contribute about two-thirds of Australia’s economic growth in 2012.

But he said weak productivity growth and the Federal deficit would be significant challenges for the economy.

Bloxham also said China’s economic stability and growth remained “the elephant in the room” for Australia.

CommSec’s State and Territory Economic Performance Report for the December quarter also said mining-geared Western Australia and Queensland remained the strongest performing states in Australia.

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