In 2012, just after taking on my current role, some colleagues and I were looking at how the Australian economy had been adjusting to the unprecedented boom in commodity prices.1 By the time I presented that work, prices of Australia’s key commodities had begun to turn down and mining investment had just peaked at a record level.2 Since then, commodity prices have fallen much further and so Australia’s terms of trade (the price of our exports relative to imports) have fallen significantly.
The fall was more than we, and most others, had expected. More recently, though, commodity prices have risen. And more than three-quarters of the anticipated decline in mining investment is now behind us.