The large fall-off in mining construction in coming years will not push up unemployment, even though the resource sector is expect to shed 60,000 construction jobs by 2018, Reserve Bank economists say.
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They also believe the Australian economy will be able to ride out China's delicate economic rebalancing because that rebalancing will take years and will be gradual enough to allow Australian commodity exporters to adjust.
Both predictions will be welcome news for Treasurer Joe Hockey, who announced this week a budget blowout of $10 billion in the face of rising unemployment and weak economic growth.
The RBA's December quarter Bulletin, released on Thursday, said investment and employment in Australia's mining sector grew so rapidly during the investment phase of the resources boom because mining companies were able to draw workers from other types of construction whose skills were readily transferable.
Now that the investment boom had peaked - it did so last year - the RBA predicted at least 60,000 resource construction jobs would be lost between this year and 2018 as investment projects wound up and the newly expanded mines moved into their operation phase.
However, RBA economist Mary-Alice Doyle said the bulk of those lost construction jobs would probably be absorbed by other sectors in the economy, meaning unemployment was not expected to rise significantly.
"The available data and the bank's liaison suggest that the workers released from the resources sector are likely to be absorbed by other sectors," Ms Doyle said.
"While a large number of resource construction jobs are ending, these workers' skills are reportedly quite transferable to residential and civil construction, for which labour demand is expected to remain relatively strong.
"A large share of these workers appear to have originally moved from other construction jobs, and so they have the requisite qualifications and experience to move back into non-mining construction jobs, contingent on labour demand."
Of the professional workers whose skills were reportedly least transferable to other industries, a substantial share were temporary migrants who were unlikely to remain in Australia if they did not find ongoing work, Ms Doyle said.
Another RBA economist, Gerard Kelly, said China's economic rebalancing towards domestic consumption and away from domestic investment meant demand for Australian minerals was likely to diminish in coming years.
But this was not necessarily bad news for Australia's economy, he said, because even though growth in Chinese demand was expected to slow over the next decade, this growth would be from a much higher base, and the overall volume of Chinese imports was likely to expand further.
"Chinese rebalancing is likely to be a gradual process, which means that the Australian economy should have some time to adapt," Mr Kelly said.
"Australian producers may well find alternative markets for their products, or the composition of production may alter in response to changing global demand and supply conditions.
"[And] a more developed Chinese economy with a higher consumption share is likely to involve greater demand by households for items such as food, education and tourism, which will provide opportunities for firms outside the Australian resources sector."
