Engineering change

Construction industry professionals have until now escaped the effects of the recession. Photo / Glenn Jeffrey

Engineers, architects and construction workers could be forgiven for thinking they need a prescription of happy pills. The past 18 months has produced one of the worst employment markets in a generation.

The professionals who have got off the lightest after the credit crunch swept through our building and construction industries are the engineers. In normal times, demand is so high for engineers that a constant stream of overseas workers have been essential to fill jobs.

Up until the early part of this year the job market was still strong, says John Lawson, recruiter at Lawson Williams. Job advertisements then fell away sharply by as much as half, according to some reports, but the market is now starting to grow again.

Having said that, local unemployed engineers may not have much joy for now. "What we are finding here in New Zealand is there is a quantity of candidates out there, but still a lack of quality," says Lawson.

"If someone is good and has good experience, there are opportunities. It's not a great market if you're average. Companies are still looking for very specialised skills to give them that competitive advantage."

Lawson says there is stiff competition for local talent from overseas professionals looking to move here. "I did a webinar for 2000 engineers in the US, who were looking to emigrate."

The recruiter analysed engineering job adverts in anticipation of the webinar and found that the most common title advertised for was designer for highways, bridges and electricity. Next was transport planners and then project managers in all disciplines.

The engineering job market is suffering, but not as badly as others, it would appear - thanks in part to the Government's spending on large scale projects.

The latest Department of Labour analysis of the supply and demand for New Zealand engineers and related professions, including architects, found that employment growth from 2003 to 2008 was close to 5 per cent per year - and far outstripped the overall rate of job growth across all sectors nationally.

The report, prepared by the DOL in conjunction with the Institution of Professional Engineers New Zealand (IPENZ) and Association of Consulting Engineers (ACENZ), found greatest demand has been for engineering technical managers at 13.1 per cent per annum, followed by electrical engineers at 11.9 per cent, and roading engineers at 8.7 per cent.

Overall growth of engineering and architecture jobs is expected to be 3.6 per cent per year until 2013 - more than twice the rate projected for the total job market - which translates into 1200 to 1300 additional jobs each year.

The credit crunch has had an impact and another report published by the DOL in September, the Construction Sector Report, shows that the numbers of employed engineers, architects and related professionals as a whole grew from December 2007 to June 2009 by 3 per cent - although the growth may not be across the board with architects having a particularly difficult time in the job markets.

The real good news story for engineers has been the Government's infrastructure spend, says Lawson. The big question for the engineering job market, however, is whether the problems the Government is having balancing its books will result in a reduction in that infrastructure spend, and the subsequent impact on the job market, says Lawson.

Like engineering, construction has been cushioned to a certain degree by the Government's large infrastructure projects and also smaller initiatives such as insulation grants, which has put a rocket under that side of the industry.

Fletcher Building's business is a good barometer for the construction industry as a whole. The fortunes of Fletcher Building are closely tied to the construction industry as a manufacturer of products used in construction, a house builder and a major player in construction and infrastructure projects. Spokesperson Philip King says although the company's total workforce has contracted by about 2500 people from its worldwide business over the past 18 months, 300 jobs have been added

to the construction business - and they are employed in large infrastructure and commercial projects such as Eden Park, Mt Eden Prison and the Tauranga and Manukau harbour crossings.

"We have probably seen a stabilisation in staff numbers in recent months." There is no improvement forecast for the next few months with new projects simply replacing existing ones that have come to a conclusion rather than adding to the existing workload, says King.

Even if the economy is starting to show signs of improvement, redundant workers who want to get back into the industry or those looking to change jobs have got longer to wait until the employment market picks up. Construction usually trails the economy by about 18 months, says King.

"First thing is to look for the economy improving." Then it's likely to take 18 months until a return to pre-recession demand for staff.

When it comes to smaller development work, housing approvals will need to increase before builders get back to work. In the early part and middle of this year the numbers of building consents hit rock bottom, although they have risen slightly since then. That's of small consolation because it's nigh impossible for developers to get finance.

Nevertheless, King is hopeful. "We are looking for signs that the residential housing market is picking up, and we are making sure we have the plans in place when the demand for our products such as big board and cement picks up."

Fletchers doesn't make predictions, says King, but the general expectation in the market place is for a modest improvement over the next couple of years.

The good news for current job seekers is that New Zealand lost 856 building workers to migration to the year June 2008 and a further net 662 in the year to 2009, with the DOL predicting future skill shortages in the industry. What's more, the number of construction apprentices fell by 18 per cent between April 2008 and April 2009 after four years of steady growth.

The report said that paid hours of construction work fell by 12 per cent between March 2008 and June 2009. It is likely that some staff are working reduced hours, and this is why the number of people employed hasn't fallen further.

The authors concluded that the construction industry was nearly at the bottom of its downturn, but employment was likely to fall further before it rose again. "When employment picks up the rise is likely to be gradual, as working hours of existing staff can be increased again before firms need to recruit."

Architects and draughtspeople have taken a huge hit in the recession with advertised jobs virtually disappearing.

Farrow Jamieson consultant Peter Browning says the number of jobs listed online in October was 30 per cent of the number in January 2008. "[Employment] is no longer dropping away. It's just continuing at a low level."

Large numbers of employers have laid off staff with a general downsizing right across the market. "What is happening now is that there is real competition for work."

Of the jobs available now, most required very specialised skills, which in many cases are best filled by professionals from overseas. Highly skilled foreigners are more keen than usual to move away from even more depressed economies than ours such as the United Kingdom and United States, says Browning. "There is more of an attraction for them to come here."

He adds that "normal run of the mill jobs" just aren't available. "Roles I have been filling [lately] are highly specialised." Browning believes a lot of professionals have simply left the industry, which will help some job seekers.

Of the three main centres, employment prospects for architects is worst in Auckland, he says.

Ironically it's a great time to be building but the banks are being extremely cautious with development finance.

Browning can't see much improvement in the architectural jobs field before early next year and even then there may be undue optimism. "There is a lot of positive talk, but there isn't always the substance behind it." The banks need to begin lending again for a real turnaround in the market. "We are hopeful."