A shortage of skills in engineering and related professional areas is affecting the building and construction sector, but opinion is divided about how severe the effects are.
A lack of experienced seismic and geotechnical engineers in Christchurch is holding back recovery there, but it is reckoned to be only one factor among several which are acting as a brake on the rebuilding of Christchurch. Graham Darlow, Chief Executive of Fletcher Building Construction Group, estimates the likely shortfall as between 1,000 and 2,000 graduates including technical staff and architects.
He sees no great shortage of engineers in general at the moment, but says “I can see it coming.”
Fletcher Construction is a member of the infrastructure alliance set up by the government in May 2011 to rebuild Christchurch. The alliance also involves the NZ Transport Agency (NZTA), CERA, the City Council, Fulton Hogan, Downer Construction, McConnell Dowell New Zealand and City Care. At the time the parties said “the public-private hybrid will oversee rebuilding Christchurch’s quake- battered infrastructure, spending an estimated $2 billion and employing up to 2000 workers.”
Mr Darlow agrees there is a shortage of structural and geotechnical engineers because of the high level of need to assess damaged structures and failed ground. “Any engineer with earthquake experience is sought after, but the shortage of engineers is not the major factor affecting the rebuild of Christchurch at this stage,” he says.
Of more significance is the insurance situation; the time taken to assess the damage, the requirement to establish the rebuild standards, and the time needed to develop a Master Plan for Christchurch, which, Mr Darlow says, will determine the land zoning and the the shape of the city after it is rebuilt.
Fletcher Construction is expecting a “profound” shortage of engineers in one to two years time. “If the economy picks up, this will make the situation even worse,” Mr Darlow says.
Graham Darlow adds: “As a company, we have recruited in South Africa, England, Ireland and even Germany over recent years, although most of these (engineers) do not have any seismic experience.”
Kieran Shaw, Chief Executive of the Association of Consulting Engineers New Zealand, says the critical shortage of structural engineers is made worse by the Christchurch situation. “Experienced civil and structural engineers have been in short supply in recent years, and this may become a severe problem for the industry as ageing engineers with valuable experience retire. There is also an ongoing and significant shortage of technicians and CAD [computer-aided design] draftspeople. This is hampering small and medium sized firms, who have got engineers tied up doing work that they would prefer to employ techs to undertake.
“The other problem for small and medium sized firms is that it is hard to get experienced senior engineers – particularly in places like Hamilton, New Plymouth, Tauranga and other provincial centres.”
One mitigating factor on regional resource levels, he says, is the lack of investment by local councils which means less work for firms, but also less pressure on limited engineering resources in some regions. “Some large firms are using their provincial offices to undertake work from other centres such as Christchurch, and there is also national infrastructure work and various overseas projects being resourced in the main centres. Local authority earthquake strengthening and structural inspection requirements have created their own niche market demand, but so far a lot of reports have been completed, but little physical work has started.”
The Christchurch problems are a common refrain, but views about the nature and severity of the problems – and what the best solutions are – vary.
Derrick Adams, Chief Executive of civil engineering firm HEB Construction Ltd, says the current perception is that there is more capacity than demand.
“The global financial crisis led the government to put a lot more money into the NZTA, but that work is slowing down, and there is now probably a slight capacity surplus in roading.
We are starting to see work picking up in Christchurch but it’s only a small increase.”
Mr Adams sees “a short term hiatus”, but he expects the rebuild in Christchurch will lead to an increase in demand for all categories of engineering and related professions. “Right now the regions are flat, and the private sector market has not got much life.”
Maxim Projects, a Christchurch based development and construction group with over a billion dollars worth of work on its books, is tackling the skills shortage directly by going on a recruitment drive in Auckland.
Logan Townsend, Director at Maxim, says Christchurch “is a difficult environment to get involved with. It’s understanding who is in charge of which part … where does the risk profile start and finish. Navigating a way through the process [of getting work approved] is the hardest part.”
On a national level, Jeremy Sole, Chief Executive of the New Zealand Contractors’ Federation, says there is a general shortage of skilled people and the primary focus of the problem is Christchurch. “Contractors are laying off lower level people in our sector at the moment, because there is a downturn in work. There is a shortage of engineers, but our real problem is a shortage of work.”
He also draws attention to the problems of an ageing workforce in the construction sector, and the impact this can have on productivity. “For example, there are a lot of experienced staff who are in their late working lives. The impact of losing them can be seen in the example where a new staff member, with the requisite qualifications but not the experience, makes three or four passes with a grader on a piece of road where an experienced person may only need to do it once to get it right.”
Mr Adams agrees the situation is quite concerning. “If you look at the average age of a supervisor it’s getting up there. We recruit engineers locally each year and things are reasonably stable there, but there are shortages in the trades supervision and foremen, which is the result of an ageing workforce. Expats are coming to us, but we are not making a major recruitment drive, but we are benefitting from the downturn in work overseas with Kiwis returning to New Zealand.”
In a completely different sector – aerospace – the story is similar.
Aerospace products are more engineering-intensive than any others, according to Mike Pervan, General Manager of Altitude Aerospace Interiors, which is based at Auckland International Airport. “The cost of engineering as a percentage of the unit price of an item is much higher in aviation than in most other industries.”
Altitude is relatively well placed, Mr Pervan says. “It is a young, dynamic company in a country with a good supply of engineering graduates but it’s also attractive to older engineers with one eye on retirement.
“We look at it as a strategic opportunity,” he says. “The industry we’re in continues to grow at a faster rate than global GDP. The demand side is very favourable, with lots of new aeroplanes, all needing interiors. That’s positive, but there is definitely a shortage of experienced aerospace engineers.”
He notes that 58 per cent of aerospace engineers are over 50 years old. “So a substantial part of the industry is going to retire in the next 10 to 15 years, yet demand continues to grow, it doesn’t abate,” he says.
So how might the supply of those with engineering skills – at various levels – be increased? Immigration is one obvious, short term, answer. Engineers of all types, and other skilled personnel, such as project managers, site foremen, and engineering technicians have been on the Department of Labour’s Long Term Skill Shortage List of desirable migrants for many years, as they are on similar lists in other countries.
Another part of the answer is to increase the number of people seeking to train and qualify in engineering.
Futureintech is a government-funded initiative developed and run by the Institution of Professional Engineers New
Zealand to boost the number of students choosing a career in engineering, technology and science.
The scheme uses ambassadors from engineering companies to work in schools to influence career choice, and is “absolutely brilliant”, according to Mr Darlow.
“Futureintech and the Techlink programme are very valuable tools to attract more people into the engineering profession and the industry generally. But we have to make sure that students choose the right subjects early in their secondary schools careers.”
Essentially, there seems to be general agreement that there is a skills shortage in New Zealand, particularly in Christchurch and some provincial centres. At the same time, there’s no single answer to boosting New Zealand’s supply of skilled staff in the engineering and related professional areas. Rather, there are a number of initiatives and options that pieced together could be good for the sector, and the country, as a whole.