Plant & Equipment

Resources, infrastructure skills and wages competition escalates

The June quarter Clarius Skills Index reached the closest tension between supply and demand of skilled labour in a decade amid uncertainty about Australia’s current and future economic conditions. As a result, employers are taking a cautionary approach to hiring decisions.
Despite the softening of the market, metal trades people remain the occupation category with the greatest skills shortages for the third consecutive quarter.
The Index reading was in the extreme category of 108.9 in June, indicating a shortfall of 10,900 metal tradespeople across the country. Building and engineering professionals increased to 100.3 in the June quarter, and building and engineering associate professionals received a moderate Index reading of 99.9.
The Clarius Skills Index – prepared by KPMG Econtech – is the only measure of the supply and demand of skilled labour in Australia. A score of 100 in the Index indicates equal tension between supply and demand.
Phil Desmet, the executive general manager of Clarius’ engineering and building services division, SouthTech, said demand had improved across the sector, particularly for mechanical skills, and is expected to further rise due to rebuilding and investment projects related to the next leg of the resources investment boom.
“The buoyant resources sector has led to a sustained demand for engineering skills, particularly in Queensland and Western Australia, with reports of acute labour shortages amongst the blue collar trades as well as for civil, mechanical and electrical engineers,” Mr Desmet said.
He added that while all sectors exposed to the mining industry were benefiting from this demand, remuneration across mining in Western Australia had increased by up to 25 per cent since December 2010, placing the industry under pressure to lift wages.
“Mining companies with deep pockets, predominantly in the coal, oil and gas sectors, are willing to pay premiums for local talent, placing employers under the pump to offer more attractive remuneration packages,” Mr Desmet said.
“Candidates are relocating interstate to take advantage of higher salaries. Many tradespeople are relocating to Queensland in search of higher wages as a result of the post-flood building and repair efforts.”
Phil Desmet added that general uncertainty about global and local economic conditions was driving companies to hire on a contractual basis, rather than on a permanent basis, adding to those wages pressures which are spreading into other sectors such as building and engineering, particularly in Western Australia and Queensland.
Mr Desmet said employers in NSW are expecting a number of infrastructure projects to be announced under the new State Government, which will increase demand for engineering and project management skills in the State over the long-term.
“Employers in the engineering and building sector have welcomed the Federal Budget initiatives to boost training programmes and trades. The increase in the number of permanent migration visa allowances will also help to address labour shortage in the sector, but employers believe more should be done to increase flexibility,” Mr Desmet said.
Mr Desmet said while the skills gap had closed, the introduction of the carbon tax could boost further demand in the long-term following greater investment in Queensland’s rebuilding efforts and continued resources sector investments.
“The implementation of the carbon tax will increase the demand for various skilled occupations in the sector, including wind farm design, management and installation,” Mr Desmet said.
“While employers consider the carbon tax plan to be an important factor in future hiring patterns, they do not consider its impacts to be immediate.”

Sources: SouthTech/KPMG Econtech/Lighthouse Communications

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