Labour Market Research –Engineering Trades

VictoriaDecember quarter 2017

Occupations in cluster / Rating
3222-11 / Sheetmetal Trades Worker / Shortage
3223-11 / Metal Fabricator / Shortage
3223-12 / Pressure Welder / Cannot rate
3223-13 / Welder (First Class) / Shortage
3231 / Aircraft Maintenance Engineer / Shortage*
3232-11,12,13 / Fitter / No shortage
3232-14 / Metal Machinist (First Class) / Shortage
3233-13 / Locksmith / Shortage*

* Occupation assessed at the national level, separate rating not available for Victoria

Key issues

  • Shortages were evident for all engineering trades occupations except fitter.
  • The proportion of vacancies filledwas the lowest in a decade.
  • The average numbers of applicants and suitable applicants per vacancy were the second lowest in a decade.

Survey results

  • Employers in Victoria found it more difficult to recruit engineering trades workers in 2017 than in any other year of the previous decade (see Figure 1, below).
  • In 2017, 41 per cent of engineering trades vacancies were filled.
  • Employers received an average of 7.6 applicants per vacancy, of whom 1.3were considered suitable.
  • One third of employers received no suitable applicants.

Figure 1: Proportion of vacancies filled (%), average number of applicants and suitable applicants per
vacancy (no.), Engineering trades, Victoria, 2008 to 2017

Reasons vacancies remained unfilled

  • Most unfilled vacancies were the result of insufficient suitable applicants.
  • Over one quarter of employers were unable to fill their vacancies despite receiving one suitable applicant or more.
  • Approximately half of all metropolitan employers of metal fabricators and welders (first class) remained unable to fill their vacancies due to an inability to reach agreement with preferred applicants about remuneration levels.
  • Of those occupations assessed at the state level, sheetmetal trades worker employers had the most difficulty filling vacancies and received the second lowest average number of suitable applicants per vacancy of all the engineering trades (see Figure 2, below).
  • Approximately two thirds of sheetmetal trades worker employers received no suitable applicants.
  • Employers of metal machinists (first class) experienced the lowest average number of suitable applicants per vacancy and the second lowest proportion of vacancies filled (see Figure 2 below).
  • All metal machinist (first class) roles required qualifications. While more than half of applicants were qualified, employers considered 93 per cent of these to be unsuitable mainly due to a lack of relevant experience or duration of experience in a similar role.

Figure 2: Proportion of vacancies filled (%), average number of applicants and suitable applicants per
vacancy (no.), Engineering trades, Victoria, 2017

Reasons applicants were unsuitable

  • Approximately three quarters of vacancies required qualifications and 2.5 applicants per vacancy were qualified, on average. Of these, however, 61 per cent were considered unsuitable.
  • Other than a lack of qualifications, reasons for unsuitability across the engineering trades included lack of technical skills (especially welding) or experience in a similar role, an unstable work history,andan inability or unwillingness to operate machinery essential to the role.

Demand and supply trends

  • The majority of employees in this occupation are employed in the manufacturing industry followed by the construction industry.[1]
  • Victoria’s manufacturing industry Gross Value Added (GVA) – an indicator of overall industry activity – has been in decline since June 2015 and, in June 2017, recorded its lowest level in five years. Further, it contributed approximately 7.4 per cent to the total Victorian GVA in 2017, the lowest contribution in five years.[2]
  • Actual expenditure in Victorian manufacturing decreased by 1.9 per cent over the year ending June 2017 but is at the fifth highest level recorded (quarterly) in five years.[3]
  • Despite the final closure of major car manufacturing in October 2017, the Australian Industry Group reported that manufacturing conditions remained generally stable outside of the automotive subsector[4].
  • Preliminary data indicate that the value of engineering construction work done increased by approximately 15.6 per cent over the year to September 2017, an increase of 50 per cent on the previous year’s growth (10.4 per cent).[5]
  • Internet vacancies for the engineering trades have been trending up since 2015 with advertisements for sheetmetal trades, structural steel and welding trades workers all reaching five year peaks in the latter half of 2017.[6]
  • An apprenticeship, including a certificate III qualification, is the main pathway into the engineering trades.[7]
  • Commencements in engineering trades courses have been trending down over the previous decade from a peak of 2237 in 2006-07 to a record low in 2016-17 of 1,102 starts.
  • Completions have fluctuated over the previous decade (peaking in 2010-11) but have been trending down overall, resulting in a record low in 2016-17 of 741.[8][9]

Outlook

  • The expected short and long term capital expenditure – an indicator of industry confidence and likely future activity levels – in Victorian manufacturing increased (by 14.4 per cent and 3.4 per cent respectively) on the previous year and, as at December 2016, were at the highest levels in four years.[10]
  • Employment in manufacturing over the five years to May 2022 is projected to decrease by 5.5 per cent, compared with growth of 8.8 per cent for all industries in Victoria.[11]

Labour Economics Office Victoria

Department of Jobs and Small BusinessPage 1

[1] Australian Bureau of Statistics (ABS), Census of Population and Housing, 2011

[2] ABS, Cat. No. 5220.0, Australian National Accounts: State Accounts, Table 03. Expenditure, Income and Industry Components of Gross State Product, Victoria, Chain volume measures and current prices, latest release

[3] ABS, Cat. No. 5625.0, Private New Capital Expenditure and Expected Expenditure, Australia, TABLE 7B. Actual and Expected Capital Expenditure by Industry - Victoria: Current Prices $; Nov-16 (NB: estimate has a relative standard error of 10% to less than 25% and should be used with caution.)

[4] Australian Industry Group, Australian PMI: Manufacturing enters second year of growth, November 2017.

[5] ABS, Cat. No. 8755.0, Construction Work Done, Table 08, Value - Construction Work Done, Chain Volume Measures (latest release)

[6] Department of Employment, Internet Vacancy Index, September 2017, 12 month moving average

[7] Australian and New Zealand Standard Classification of Occupations (ANZSCO) 2013, Version 1.2 (Alternatively, at least three years of relevant experience may substitute for a formal qualification. Relevant experience and/or on-the-job training may be required in addition to the formal qualification.)

[8] National Centre for Vocational Education Research (NCVER), Apprentices and Trainees, March 2017, estimates (limited to Certificate III)

[9]The immediate effect of training completions on supply to this trade may be limited due to a number of employers requiring sector-specific experience, in addition to a trade qualification.

[10]ABS, Cat. No. 5625.0, Private New Capital Expenditure and Expected Expenditure, Australia, TABLE 7B. Actual and Expected Capital Expenditure by Industry - Victoria: Current Prices $; Nov-16

[11] Labour Market Information Portal – 2017 Regional Projections to May 2022, Interactive Tool