BHP typifies Australia's lost decade

By Leith van Onselen

Another illustration of why GDP is an utterly useless indicator of economic welfare was provided yesterday afternoon, with BHP registering a 46% reduction in earnings before interest and tax (EBIT), with heavy commodity price falls easily eclipsing a significant lift in production volumes (see below table).

The fall in BHP’s EBIT was, of course, led by iron ore, where EBIT fell by $5,170 billion (43%), despite a 14% increase in iron ore production volumes to a record 233 million tonnes:

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

BHP typifies Australia’s lost decade