Earlier this month, I noted how falling mining equipment sales could be a harbinger of a sharper than expected reduction in mining capex. Then earlier this week, mining services contractors, Coffey and UGL, cut their earnings guidance for 2013 and announced plans to cut jobs amid a raft of project delays and cancellations in the mining industry.
Today, Worley Parson’s has provided yet another indication of a sharp slowdown in mining capex, lowering its profit guidance following lower demand for resources infrastructure in Western Australia. From the AFR:
WorleyParsons has become the latest victim of the resources slump, warning “softening demand for resources infrastructure” will hit 2013 profits…
“The West Australian business has been impacted by the softening of demand for resource infrastructure as clients defer major projects and implement cost management initiatives,” the company said…
WorleyParsons’ profit downgrade comes as increasing number of contractors and engineering firms caution they are being hit hard by the resources downturn, with UGL, Sedgman Resources and Coffey International all issuing profit warnings this week.
Contractors are being hurt as miners cut back on costs…
UGL CEO Richard Leupen has called on state governments to find ways of boosting private funding for infrastructure projects to compensate for the decline in mining projects.
