Engineering Recruitment, Engineers Recruitment, Engineering Employment, Engineering Professionals, Engineering Jobs, WA, Australia

24 February 2011

Recent ABS statistics put the scarcity of engineering skills into perspective, indicating that low unemployment and a fall in participation sets the scene for persistent engineering skills shortages,

In a recent article by Engineers Australia, economist and policy analyst, Andre Kaspura writes that as the Australian economy approached the global financial crisis, all available information suggested severe shortages of engineers. However, this view was based on indirect measures and anecdotal information as necessary objective statistics for engineers simply were not available, Kaspura says. In Australia, labour force analysis typically rely on the ABS monthly Labour Force Survey. For most macroeconomic purposes this reliance presents few problems, but presents difficulties for monitoring changes in the engineering labour force because it does not measure formal educational qualifications. The statistics required for Engineers Australia’s purpose are not published in the regular editions of Education and Work and were obtained through a fee for service consultancy from the ABS. The article discusses some preliminary findings from the data obtained to highlight how the engineering team fared in the lead-up to the global financial crisis and its consequences.

The trends for the engineering team are put into context by comparing them to the Australian labour force as a whole with no regard for post-school qualifications. In 2010 the engineering labour force was 366,600 compared to 242,200 in 2001. Average annual growth of 4.8% increased it from 2.5% of the Australian labour force to 3.2%. This growth was much faster than for the general labour force where annual growth averaged 1.9%. A key feature of the engineering labour force is its particularly high labour force participation rate. In contrast, although overall labour force participation for Australia increased steadily from 75.0% in 2001 to 78.2% in 2010, it remained well below participation in engineering. In both cases, labour force participation fell during the global financial crisis in 2008 and 2009.

There was a particularly large fall in engineering labour force participation from a peak of 91.5% in 2008 to 90.1% in 2010 with a withdrawal of about 8,500 engineers from the labour market. In contrast, the rise in participation rate from 88.9% in 2004 to its peak of 91.5% in 2008 added about 9,900 engineers to the labour force and can be attributed to the encouraging influence of boom conditions for engineering employment.

Cutbacks in new engineering project commencements and falling production in manufacturing saw the engineering unemployment rate rise to 4.1% in 2009, before easing to 3.7% in 2010. The increase in the numbers of engineers unemployed reached 6,500 or 79% compared to 40% for the general labour force.

If engineering construction rises in line with the Construction Forecasting Council’s projections, the demand for engineers is expected to increase once again reducing unemployment below the 3.7% in 2010. The global financial crisis led to 8,500 engineers leaving the labour force and increased unemployment among engineers by 6,500. Although the resumption of strong demand growth has been delayed, 2011 is likely to see renewed focus on engineering shortages.

Excerpt from: Engineers Australia, February 2011.

Note from the Editor: In his article Andre Kaspura also points out that the ABS statistics do not account for the growing number of qualified engineers pursuing non-engineering work which further reduces the supply of skills available to meet increasing demand.

Another significant point worth noting here is that inherent delays in non-participating engineers returning to the work force will also exacerbate the looming engineering skills shortage. Kaspura mentions that 8,500 engineers withdraw in the two years after 2008 (which he attributes to a discouraged worker effect), while it took an unprecedented boom over four years from 2004 to encourage 9,900 previously non-participating engineers back into the work force.