New figures released today show an oversupply of engineers in Australia during the March quarter, 2013.
A slowdown in China's growth story has been a key factor in the sudden turnaround in the demand for engineers, according to the new Clarius Skills Indicator, but there is a growing requirement for engineers who can put deals together.
The Indicator reveals an oversupply of 1,100 professionals among Australia's 156,000 engineers for the first time since the GFC.
It is the first time in years that supply for this vital skills area has outstripped demand. There was a shortage of 4,100 engineers in the March quarter 2012, and a shortage of about 1,000 in the most recent quarter of December, 2012.
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 took 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.
"However, engineers in middle management are being shed at the most rapid rate and there is a willingness among senior professionals to accept salary reductions of between 20-50 per cent to secure positions.”
Barbaro said that up until this year, the engineering sector had been out-performing other key employment categories, mainly due to continued strength in the mining sector in Western Australia.
"Due to weaker commodity prices, we are now seeing a decline out west leading to projects being cancelled, delayed or put on hold indefinitely. This can be viewed as a market correction rather than downturn due to previous record high demand," he said.
"This is especially impacting on contracting which has been typically the big part of engineering recruitment."
In 2012, Barbaro said many companies were willing to utilise their cash reserves from the boom cycle to hold on to skilled engineers and ride out what they hoped would be an aberration.
"However, that approach is unravelling as they realise projects are not going to proceed in the short-term," he said.
As a result engineers are now heading back to their home states and territories.
Barbaro said that as a contingency, mining companies were asking recruitment agencies to create talent pools to be on standby so they could deploy resources rapidly once project wins materialised.
"For the first time, we've been requested to put together pods of people who are shovel ready so they can swing into action at a moment's notice," he said.
Barbaro said a tightening of fiscal policy in the public sector and a lack of diversification in large scale projects had put a squeeze on engineering professionals operating outside of the mining and resources sector.
"The sub-sectors that have suffered the most over an extended period are professionals operating in the architectural and construction engineering space,”he said.
"These professionals have been impacted by the more rapid slowdown in the economy outside of the mining industry and they are finding it increasingly challenging to find work of any kind in the construction engineering market."
Conditions for Australia's construction firms slumped to the lowest point in seven months in April, according to an index published by the Australian Industry Group and Housing Industry Association.
The bearish data came a day after building materials company Boral downgraded its annual profit guidance.
The Clarius Skills Indicator, which was introduced in 2008, draws on a range of data including the Australian Bureau of Statistics (ABS) and Commonwealth Department of Education, Employment and Workplace Relations (DEEWR) to measure oversupply and shortfalls for 10 major occupation categories
