Anzsco 2335-12 South Australia

ANZSCO 2335-12 South Australia

Mechanical Engineer April 2017

Current labour market rating No Shortage

Previous labour market rating (April 2016) No Shortage

Comments

There are large numbers of applicants for mechanical engineering vacancies in South Australia and employers have little difficulty recruiting. Results of the survey indicate there is no shortage of mechanical engineers.

Survey results

The businesses contacted were from various industry sectors including mining, manufacturing, heavy industry and civil engineering construction and government.

A survey of employers who had recently advertised for mechanical engineers found that 86 per cent of the positions were filled.

Over the past few years employers have attracted large numbers of applicants for their mechanical engineering vacancies. In 2017, there were in excess of 50 applicants per vacancy on average, of whom 49 were qualified.

Although there were large numbers of applicants (the majority of whom held mechanical engineering qualifications) just 1.6 applicants per vacancy were considered by employers to be suitable (compared with 2.5 in 2016).

All employers received interest from qualified mechanical engineers and 91 per cent of applicants held the relevant, bachelor degree or higher, qualifications; denoting employers had a large choice of candidates.

In addition to relevant qualifications the majority of employers were looking for specialised industry specific experience.

Overall, survey results of recently advertised vacancies portray a labour market where sufficient mechanical engineers exist to meet levels of demand. Therefore, the occupation is rated as being not in shortage.

Unsuitable applicants

All employers required applicants to be degree qualified in mechanical engineering and over 90 per cent of all applicants met this minimum criterion.

Despite the high proportion of qualified applicants, employers considered only three per cent of these applicants to be suitable.

Many qualified applicants did not have the specific technical skills (automation, design skills) or experience relevant to the particular role or industry. Others lacked experience in the occupation. For example, they did not have Australian industry experience or were recent graduates.

Employers within the manufacturing industry were generally looking for applicants with a minimum of five years’ experience.

In some cases applicants were considered to be unsuitable because they lacked the required written and oral communication skills.

Demand and supply trends

Demand for mechanical engineers is determined in part by activity levels in the manufacturing industry and industries such as oil and gas, construction and mining.

Despite indicators being mixed, demand for mechanical engineers has increased.

According to ABS capital expenditure survey data¹, investment in the SA mining and manufacturing industries fell moderately in the year to December 2016.

The value of SA non-residential building work done² in 2016 decreased.

Despite the fall in capital expenditure, copper exports grew by 45 per cent³ in the 2016 financial year. In the same financial year, copper was South Australia’s largest export item by value⁴.

Mining sector specific job advertisements increased in the 2016-2017 financial year⁵.

Advertised vacancy numbers for the broader occupational group Industrial, Mechanical and Production Engineers increased, from a low base, in the year to March 2017 following a four year trend of decreasing vacancy counts⁶.

University training is a major source of supply to the occupation. According to the Department of Education and Training the number of undergraduate commencements in mechanical engineering courses in SA decreased to the lowest level recorded in seven years. Conversely, course completions have remained steady for 2015, maintaining the levels of a moderate increase in 2014.⁷

Since 2011-12 there has been a gradual reduction in the number of Subclass 457 visas granted⁸ for the occupation of mechanical engineer. At March 2017 there was only a low number of Subclass 457 visa holders in South Australia for the occupation of mechanical engineer.

Outlook

Optimism exists within SA engineering businesses and positive trends are being experienced in current and expected activity levels. Optimism also translates to staffing where a larger number of businesses are expected to maintain or increase workforce numbers.⁹

The value of SA non-residential building approvals¹⁰ rose by 24 per cent in the year to December 2016.

1^ ABS, Private New Capital Expenditure and Expected Expenditure, Australia, Cat. No. 5625.0

2^ ABS, Building Activity, Australia, Cat. No. 8752.0

3^ Investment Attraction South Australia, latest news August 3, 2016 < https://invest.sa.gov.au/news/south-australias-overseas-goods-exports-continue-rise/#.WX7RXY1lLoo>

4^ Department of Foreign Affairs and Trade < https://dfat.gov.au/trade/resources/Documents/sa.pdf>

5^ Resources and Engineering Skills Alliance, Webinar: Mining Jobs and Opportunities in South Australia.

6^ Department of Employment, Internet Vacancy Index, March 2017, 12 month moving average

7^ Department of Education and Training, Higher Education Student Data Collection, 2015, customised tables

8^ Department of Immigration and Border Protection, https://www.immi.gov.au/media/statistics/statistical-info/temp-entrants/subclass-457.htm, Subclass VISA Holders in Australia as at 30 March 2017

9^ Australian Industry Group, Engineering Business Trends Report - A monthly survey of South Australia’s Metal and Engineering Industries conducted by the Australian Industry Group South Australia, March 2017

10^ ABS, Building Approvals, Australia, Cat. No. 8731.0

Labour Economics Office South Australia

Department of Employment