Earlier this month, I noted how falling mining equipment sales could be a harbinger of a sharper than expected reduction in mining capex.
Today, Australian Mining has revealed that Coffey, a mining consultancy group, has cut its earnings guidance for 2013 and announced plans to cut jobs after an “alarming spike in project delays and cancellations from the resources industry”:
Coffey said falling commodity prices, the high dollar, and an uncertain political environment had created “deteriorating market conditions” in Australia, and around 150 redundancies were being implemented to stem the losses.
“The softening market conditions have impacted the Australian Geosciences and Project Management businesses…
“We began seeing the impact of these project delays on our geosciences revenue in Q3 FY2013. Geosciences fee revenues for the March quarter of $59.5m were four per cent lower than the previous corresponding quarter, which was not a strong quarter.”
Coffey said in the past six weeks 54 contracts had been delayed or cancelled, and it released an alarming graph showing the rise in cancellations and delays for its geosciences business.
“These delays were initially mostly in the mining sector, and are now across a range of sectors including infrastructure and oil and gas,” the company said.
