Engineers in the New Zealand Labour Market
Executive summary
This report presents for the first time a collection and analysis of labour market information and other data sources on a range of engineering occupations.
An estimated 54,000 workers were employed in engineering occupations in March 2008. They comprised 2.5% of the total workforce in New Zealand.
Very strong employment growth (4.8% per annum) for architects, engineers and related professionals over the last five years suggests that these occupations, which currently employ around 31,600 workers, are under considerable demand pressure.
The current labour market is changing rapidly; information that is just coming out and could not be included in the report indicates some softening is beginning to occur in this labour market. However, engineering-related job losses have not yet been reflected in official statistics.
Employment forecasts from the Department of Labour indicate that demand growth will continue for engineering professionals. It is expected that an additional 1,200 to 1,300 engineering professionals will be required each year over the next five years.
These growth forecasts are supported by information obtained from various industry sources which indicate that expenditure growth is likely to remain high across a number of infrastructure-related industries (such as road, rail, gas, electricity and telecommunications).
In addition to the increased demand caused by industry growth, more engineers will be required to replace engineers who leave their occupation because of retirement and other reasons. It is expected that an additional 500 workers per year will be required over the next five years to meet this net replacement demand.
At first sight, the supply of engineering professionals looks set to meet demand requirements. Around 1,200 to 1,500 people graduate with professional engineering qualifications each year and this supply is supplemented by engineering-qualified long-term immigrants, estimated to be around 200 to 350 per year.
However, the actual supply of engineers entering the New Zealand labour market may be considerably less than the sum of these numbers due to a number of factors. For instance, some engineering graduates may seek employment in other non-engineering occupations, for a variety of reasons, and therefore not end up working as engineers. Second, anecdotal information suggests around 30% of new graduate engineers leave New Zealand within three years of graduating. Third, some immigrants who list engineer as their occupation do not have the prerequisite qualifications, skills or experience to work as professional engineers in New Zealand.
The evidence is inconclusive on whether or not there are general skills pressures for non-professional engineering occupations, where around 22,100 workers are currently employed. Recent employment growth in physical science and engineering technicians (2003-08) was 2.4% which was half that of engineering professionals.
Bringing together labour market information on the supply and demand for engineers is complicated and limited by several factors.
- Supply side data is limited - in terms of immigration and the flow from educational institutions to employment.
- Information for both supply and demand is largely at the level of aggregate engineering occupations, meaning that specific shortages are difficult to capture.
In order to gain a better understanding of the labour market challenges facing the engineering sector, further research is needed into the following areas:
- An analysis of the employment outcomes of engineering graduates (in particular how they transition from training into employment).
- An investigation of the attributes and employment outcomes of migrants with engineering backgrounds.
