Engineering Trades

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Department of Education, Employment and Workplace Relations

Labour Market Research - Engineering Trades

September 2012

Occupations in cluster Rating1

Number of years

in shortage,

5 years to 2012

3222-11 Sheetmetal Trades Worker Shortage 4

3223-11 Metal Fabricator No Shortage 2

3223-13 Welder (First Class) No Shortage 1

3231-11 Aircraft Maintenance Engineer (Avionics) No Shortage 3

3231-12 Aircraft Maintenance Engineer (Mechanics) No Shortage 33232-11,12,13 Fitter Regional

Shortage

3

3232-14 Metal Machinist (First Class) Shortage 4

Key Issues

The engineering trades labour market is complex, with recruitment experiences varying markedlydepending on occupation, location and industry. Shortages are patchy and few of these trades

are in national shortage. The extent of shortages has been highly variable since the peak demand

period in 2007 and 2008 when shortages were widespread.

o Although fewer engineering trades were in national shortage in 2012 than in 2011, employersfilled a lower proportion of their vacancies overall, as a result of a marked fall in the proportion

of vacancies filled for sheetmetal trades workers, fitters and metal machinists.

Figure 1: Proportion of consistently assessed engineering trades in shortage, 2007 to 2012

Source: DEEWR Skill Shortage Research

Note: Excludes Locksmith (3233-12) and Toolmaker (3234-12) as these occupations were not assessed in 2012.

1 Based on research undertaken in the September quarter 2012.

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2007 2008 2009 2010 2011 2012

Proportion in shortage Proportion in regional shortage or recruitment difficulty

ISSN

2201-586

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o Employers in Western Australian and the Northern Territory filled small proportions of theirvacancies compared with employers in other states and territories.

o A number of employers reported that strong demand from the resources sector hasincreased competition for experienced and qualified workers. Non-resources sector

employers often commented that they were unable to match the salaries offered in the

resources sector.

o Resources sector employers tended to be very prescriptive about the required skills andexperience, while some employers in other sectors indicated that they had to compromise

on desired qualifications and/or experience to fill positions.

Overall, demand is strong and employment has grown over the last five years.o Employment growth and rising vacancy levels have been driven by increases in the largest

employing engineering trades (metal fitters and machinists and structural steel and welding

trades workers).

o There has been a notable decline in demand for Licensed Aircraft Maintenance Engineers,with recent retrenchments reflected in lower employment numbers.

Employment of engineering trades workers is projected to continue to rise over the next fiveyears despite further anticipated contraction in the key manufacturing sector.

o Across all occupations, employment in manufacturing is projected to decline by 9.0 per centover the five years 2011-12 to 2016-17, while employment in construction and mining

(which employ much smaller numbers of engineering trades workers) is expected to increase

(up by 12.6 per cent and 43.4 per cent, respectively).

Survey Results

Despite a general softening in the Australian labour market in 2012, and little change inmanufacturing employment over the year to August 2012, the labour market for engineering

trades tightened somewhat. Although a re-emergence of significant shortages did not occur, employers had more difficulty

filling engineering trade vacancies in 2012 than they did in 2011.

o A lower proportion of vacancies were filled (58 per cent compared with 65 per cent),although the average number of suitable applicants per vacancy was unchanged (1.5).

Figure 2: Proportion of vacancies filled and number of suitable applicants per vacancy,

Engineering trades, 2007 to 2012

Source: DEEWR Survey of Employers who have Recently Advertised

Note: Between 2007 and 2011, the results for engineering trades included Locksmith (3233-12) and Toolmaker

(3234-12), but these occupations were not assessed in 2012.

0.0

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4.0

6.0

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2007 2008 2009 2010 2011 2012

(no.)(%)

Proportion of vacancies filled (%) - LHS Suitable Applicants per Vacancy (no.) - RHS


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There was a marked variation in employers recruitment experiences across states andterritories, with the labour market for these trades particularly tight in Western Australia and the

Northern Territory, where employers filled a low proportion of surveyed vacancies (Figure 3).

o Employers recruiting in Western Australia filled 41 per cent of their vacancies and those inthe Northern Territory filled 52 per cent.

o Employers in other states filled vacancies with relative ease. For example, employers inSouth Australia filled 81 per cent of their vacancies.

Figure 3: Proportion of vacancies filled by state (ranked), Engineering trades, 2012

Source: DEEWR Survey of Employers who have Recently Advertised

Generally, employers in metropolitan areas recruited more easily than those in regional areas.o Metropolitan employers filled a higher proportion of their vacancies (61 per cent) and

attracted larger numbers of suitable applicants per vacancy (1.6) than their regional

counterparts (53 per cent and 1.1). Employers across several states (particularly Western Australia, Queensland and the Northern

Territory) noted that competition for qualified and experienced engineering trades workers from

the resources sector affects their ability to fill positions and retain workers.

o A number of employers working in non-resources sector businesses compromised onrequired qualifications and/or experience to fill their positions, (for example, recruiting

workers with mainly fabrication experience to do sheetmetal or machinist work).

o On the other hand, resources sector employers were very particular about qualifications,licences, trade skills and experience, and were generally unwilling to accept applicants who

did not fully meet their requirements. This was also true for positions advertised for work ondefence contracts.

Some employers commented that they preferred to recruit local candidates.o Some regional employers were unwilling to provide assistance with relocation costs.o While some employers reported that they relied on sponsored overseas workers, others

considered international applicants to be unsuitable or were unwilling to recruit workers

from overseas.

Reasons applicants were unsuitable

Employers considered applicants to be unsuitable if they did not hold relevant qualifications orlicences, lacked relevant experience and/or an appropriate level of trade skill.

o Applicants for metal fabricator vacancies were considered by employers to be unsuitable ifthey did not have experience working with a range of metals.

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SA TAS NSW QLD VIC ACT Australia NT WA

(%)


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o Sheetmetal worker applicants were considered to be unsuitable if they did not have skills inseveral engineering trade areas; for example sheetmetal work, welding and metal

fabricating.

o Employers recruiting for Licenced Aircraft Maintenance Engineers assessed many applicantsas unsuitable because as they did not hold licences to work on specific aircraft.

o Employers of metal machinists reported that some newly qualified workers did not possessthe required range of competencies, such as operating manual and CNC lathe and milling

equipment, grinding, boring, turning, setting up, interpreting technical drawings or

programing.

It was common for employers to conduct workplace trials in a number of engineering trades, andmany candidates failed to meet employers standards.

Demand and Supply Trends

Employment

Over the five years to August 2012, employment growth2 in engineering trades was well abovethe average for all occupations (15.0 per cent compared with 8.4 per cent).

o Employment of engineering trades workers was at a record high level in August 2012(244,700).

Figure 4: Employment, Engineering trades, August 2007 to August 2012 (000)

Source: ABS Labour Force Survey, DEEWR trend

Note: Engineering trades comprises ANZSCO classifications: Metal Casting, Forging and Finishing Trades (3221), Sheetmetal

Trades Workers (3222), Structural Steel and Welding Trades Workers (3223), Aircraft Maintenance Engineers (3231), MetalFitters and Machinists (3232), Precision Metal Trades Workers (3233) and Toolmakers and Engineering Patternmakers (3234).

This includes a number of occupations not assessed by DEEWR.

Employment growth has been driven principally by a 28.8 per cent increase for metal fitters andmachinists and a 20.4 per cent rise for structural steel and welding trades workers.

o These are the largest engineering trade occupations, representing around 90 per cent ofengineering trades employment.

Employment in some of the smaller engineering trades declined over the five years to August2012, including metal casting, forging and finishing trades, toolmakers and engineering

patternmakers and aircraft maintenance engineers.

2ABS Labour Force Survey, August 2012, DEEWR trend

190

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(000')


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o Of particular note is the fall in employment of aircraft maintenance engineers (down byaround 40 per cent over the year to August 2012).This reflects a number of retrenchments

in the aviation industry. During 2012, the media3 reported on more than a thousand

retrenchments in engineering maintenance from Qantas (most at the Tullamarine, Avalon

and Sydney bases) with more than 5000 jobs lost over four years.Qantas indicates that jobs

have been made redundant because of a fall in demand for heavy maintenance due to the

acquisition of new aircraft.In addition, aircraft maintenance company LTQ Engineering

retrenched workers4 during 2012 from their Tullamarine factory.

Vacancy levels

Consistent with the rise in employment, the level of advertised vacancies5 for engineering tradesworkers has increased strongly (up by 75.4 per cent) since the lowpoint recorded over the year

to December 2009.

o Vacancies, though, remain 10.4 per cent below the peak level recorded over the year toSeptember 2008.

Growth in engineering trades vacancy levels has been driven by strong rises for metal fittersand machinists and structural steel and welding trades workers (up by 80.0 per cent and

49.3 per cent, respectively, over the three years to September 2012).

Figure 5: Internet Vacancy Index, Engineering trades, September 2007 to September 2012

(December 2006 = 100)

Source: DEEWR Internet Vacancy Index, twelve month moving averageNote: Engineering trades comprises the ANZSCO classifications: Metal Casting, Forging and Finishing Trades (3221),

Sheetmetal Trades Workers (3222), Structural Steel and Welding Trades Workers (3223), Aircraft Maintenance Engineers

(3231), Metal Fitters and Machinists (3232), Precision Metal Trades Workers (3233) and Toolmakers and Engineering

Patternmakers (3234). This includes a number of occupations not assessed by DEEWR.

Replacement demand

Replacement demand6 for engineering trades occupations is generally lower than the average forall occupations (14.2 per cent).

3Andrew Cleary, Australian Financial Review, 9 November 2012; The West Australian, 22 May 2012

4Stephen Drill and Greg Thom, Herald Sun, 27 July 2012

5DEEWR Internet Vacancy Index, September 2012, 12 month moving average

6ABS Labour Mobility Survey, February 2010

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o Annually, 7.6 per cent of Fabrication Engineering Trades Workers (which includesSheetmetal Trades Workers and Structural Steel and Welding Trades Workers) leave their

occupation group.

o The figure is a little higher for Mechanical Engineering Trades Workers (which includesAircraft Maintenance Engineers and Metal Fitters and Machinists) at 11.3 per cent per year.

Training trends and graduate outcomes

National Centre for Vocational Education Research (NCVER) data7 show the number ofapprenticeship and traineeship commencements fell to a low level in the year to March 2010,

but that there has been steady recovery since then (Figure 6).

o Commencements increased by 18.6 per cent over the two years to March 2012, but remain10.3 per cent below peak level recorded in the year to March 2008.

The number of apprenticeship and traineeship completions for engineering trades, though, wereat a record high over the year to March 2012.

o Over the two years to March 2012, annual completions increased by 8.3 per cent to be26.6 per cent higher than the year to March 2008.

Figure 6: Apprenticeship and traineeship commencements and completions, Engineering

trades, year to March 2008 to year to March 2012

Source: NCVER Apprenticeships and Trainees, Certificate III and higher, 12 months to 31 March

NCVER data8 indicate that employment outcomes after training are strong for apprentices andtrainees in Fabrication Engineering Trades and Mechanical Engineering Trades.o More than 92 per cent of 2011 graduates for both Fabrication Engineering Trades and

Mechanical Engineering Trades were still in full time employment within 6 months of

graduating.

Although apprenticeship and traineeship completions in these trades are high, there remainconcerns about training outputs.

7NCVER, Apprentices and Trainees, 12 months to 31 March

8NCVER, Graduate Outcomes, 2012

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Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12

Commencements Completions


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o A Senate inquiry9 into the shortage of engineering and related employment skillsrecommended that the government requests the Australian Workforce and Productivity

Agency, or a similar body, investigate the reasons why the attrition rates for Vocational

Education and Training courses in engineering trades are so high. Based on the findings of

this study, the committee recommends that the government work with Vocational

Education and Training providers and the states and territories to improve completion

rates.

Industry profile and outlook

Census of Population and Housing10 data show that around half of total engineering tradesemployment in 2011 was in manufacturing (50.4 per cent), with significant employment also in

mining (10.1 per cent), construction (8.6 per cent) and other services (8.6 per cent).

Manufacturing

Although manufacturing continues to be the major employer of engineering trades workers, itsimportance has declined in line with an overall decline in employment and activity in the

industry.o Between the 2006 and 201111, the proportion of engineering trades workers employed in

manufacturing fell by 5.5 percentage points.

Manufacturing is likely to undergo further structural change, which may further reduce demandfrom this industry. Although DEEWRs research does not provide information about industries,

there is some evidence to suggest shortages of some engineering trades workers are evident in

manufacturing.

o Survey results from Manufacturing Skills Australia (MSA)12 show that 95 per cent ofrespondents indicated they were short of qualified technical and trade skills, with most

respondents attributing their difficulties in recruitment to salary competition and

attractiveness of other industries. The MSA Environmental Scan lists engineering trades

amongst occupations in demand.

Mining and Construction

While the proportion of engineering trades workers employed in manufacturing has declined,strong activity in mining and in engineering construction has increased demand for some

engineering trade skills (particularly for metal fitters and machinists and structural steel and

welding trades workers).

o Over the year to September 2012, the total value of engineering construction work done13rose by 22.4 per cent to around $120 billion, with construction for oil, gas, coal and otherminerals making up around 45 per cent of the total.

The overall outlook for mining and engineering construction is for continued growth, with theinvestment pipeline likely to continue to drive demand for engineering trades workers.

o In the June quarter 2012, there was around $132 billion worth of engineering constructionwork yet to be done14, around 65 per cent of which was construction work for oil, gas coal

and other minerals.

9The Senate Education, Employment and Workplace Relations References Committee, The shortage of engineering and related

employment skills, July 2012

10 ABS, Census of Population and Housing11

ibid12

Manufacturing Skills Australia, Environmental Scan, 201213

ABS, Engineering Construction Activity, June 2012, Original14

ibid


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o The Treasury15 expects new engineering construction to grow by 19 per cent in 2012-13 and7 per cent in 2013-14, underpinned by LNG and iron ore projects.

o The Bureau of Resources and Energy Economics16 identified 98 major projects where finalinvestment decisions had occurred as at the end of April 2012, valued at $260.8 billion.

o The Infrastructure Australia National Priority List17 shows around $80 billion of infrastructureprojects are regarded as national priorities. Most of this work is not ready to proceed,

indicating that construction funded by the public sector may be strong in the coming years.

The Australian Workplace and Productivity Agency (AWPA)18 projects metal fitters andmachinists to have large employment growth in the Mining industry between 2012 and 2017 (up

by more than 5000).

o AWPA also projects that shortages of fabrication engineering trades workers and mechanicalengineering trades workers are likely over the period to 2016.

Employment projections

DEEWR projects19 that while employment for some engineering trades will decline over the fiveyears to 2016-17, the large engineering trades will continue growing in line with, or above the

average growth for, all occupations due their exposure to the resources sector. The strongestrises are expected for

o metal fitters and machinists (up by 9.9 per cent)o structural steel and welding trades workers (7.2 per cent).

Figure 7: Projected employment growth (%), 5 five years 2011-12 to 2016-17, Engineering trades

compared with Technicians and trades workers (total),

Source: DEEWR Employment Projections

15 The Treasury Mid Year Economic and Fiscal Outlook 2012-1316

Bureau of Resources and Energy Economics (BREE), Mining Industry Major Projects, April 201217

National Electronic Conveyancing System,https://www.nics.gov.au/18

Australian Workforce and Productivity Agency, Resources Sector Skills Needs, October 201219

DEEWR, Employment Projections to 2016-17

-10.1

-9.6

-2.5

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-15.0 -10.0 -5.0 0.0 5.0 10.0 15.0

Toolmakers and Engineering Patternmakers

Metal Casting, Forging & Finishing Trades

Aircraft Maintenance Engineers

Precision Metal Trades Workers

Sheetmetal Trades Workers

Structural Steel and Welding Trades Workers

Technicians and Trades Workers

Metal Fitters and Machinists

(%)
https://www.nics.gov.au/https://www.nics.gov.au/https://www.nics.gov.au/https://www.nics.gov.au/

Engineering Trades

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