For example, annual WPI growth dropped to rates that were 1 percentage point below pre-mining boom norms. More importantly though for competitiveness, growth of unit labour costs dropped by a similar amount. Meanwhile, inflation averaged 1.9 per cent, just under the inflation target range, from the end of the mining investment boom up to the pandemic.
5  It took quite a few years after mining investment had peaked for the real Australian TWI to return to be close to its pre-mining boom level. While slower wages growth contributes only gradually to adjustments in the real exchange rate, this is not true of the nominal exchange rate given it can be much more flexible.