Engineers in Oversupply for First Time Since GFC

Independent Economics consultancy The Clarius Group has released its 2013 Q1 Clarius Skills Indicator, which shows that engineers are in oversupply for the first time since the GFC.

Australia ImmigrationThe report draws on the best available data from the Australian Bureau of Statistics and Commonwealth Department of Education, Employment and Workplace Relations to measure oversupply and shortfalls for 10 major occupation categories.

Engineering is experiencing softer demand, reflecting weaker demand in WA’s and Queensland’s mining and resources sector due to weaker commodity prices and following patchy results from China. The ‘oversupply’ of 1,100 engineering job seekers in the March quarter 2013 compares to the ‘shortage’ of 4,100 job seekers in March quarter 2012.

Mining engineers, the report suggests, are increasingly drifting back to their home states and territories. This is leading to increased concentration of skills in the eastern states, which has put downward pressure on wages for contract staff with some prepared to work for salaries between 20 to 50 per cent below their normal salary demands.

As a contingency to the uncertainty surrounding major engineering and infrastructure projects, hiring managers are requesting recruitment firms to create pods of engineers to be ready at a moment’s notice so they can engage them and deploy resources rapidly when new projects do come on-line.

Despite the bad news, the Clarius report does offer some cause for optimism.

Paul Barbaro, executive general manager of SouthTech, a division of the Clarius Group of recruitment companies, said sales engineering was one area showing signs of life as companies are taking a more aggressive approach in competing for a shrinking pipeline of projects.

“Anyone who sells an engineering solution, be it hardware or innovation, are in high demand as companies attempt to fatten up their order books and try to boost revenue. Also, there is a moderate appetite for junior and entry level engineers in the sector,” Barbaro said.

After last year’s dip in the construction of super tall buildings globally, it is predicted there will be an uptick in 2013.

The development of Barangaroo and the events precinct in Sydney’s Darling Harbour present some opportunity as does the Fishermans Bend project in Melbourne. However, a broader based recovery and a commitment to more large-scale civil engineering and building projects will be required to turn around the current situation.

As with other employment categories, firms operating in the building and engineering space are awaiting policy announcements from both sides of politics in the lead-up to the Federal election to help inform their longer term recruitment settings.

However, the labour market balance for engineering professionals is subject to large swings and has only been in surplus once before (in the December quarter of 2009, following the GFC). This means the market could turn quickly if economic conditions improve, the report says.

In the wider industry, recruiting conditions are tougher than normal in the Northern Territory, but labour demand in the construction industry is strong. Conversely, the building labour market is soft in Queensland and Tasmania.

In Western Australia, the unemployment rate has moved back to normal levels as labour demand in the mining industry has softened.

The lull in demand for architects and construction engineers continues with NSW and Victoria recording the lowest demand. This segment is an important bellwether for construction activity, so the remainder of the year is shaping up as moderate, reinforced by the recent release of a key indicator revealing the building industry suffered its 34th consecutive month of slowdown in April.

Overall in Australia, the latest unemployment data, for the month of March, shows a further rise in the unemployment rate to 5.6 per cent.

Source: http://designbuildsource.com.au/engineers-in-oversupply-for-first-time-since-gfc

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