CHANGES IN THE NT ENGINEERING LABOUR MARKET

November 2012

KEY POINTS This Note examines the main changes that have occurred in the Northern Territory engineering labour market between 2006 and 2011. The statistics used are from the ABS censuses in those years extracted using the ABS on-line TableBuilder Pro facility. In the NT, the engineering labour force participation rate was considerably higher than the national rate in 2006 and increased further in the five years to 2011 reflecting strong labour market conditions. The supply of engineers increased by 513 or 37.5% between 2006 and 2011 to 1,881. This change was equivalent to annual compound growth of 6.6%, above the national growth rate of 5.6%. The supply increase in the Territory was less than one percent of the national increase. The proportion of engineers who are women in the Northern Territory increased from 8.0% to 10.7%, but remained less than the national figure of 11.8%. One quarter of the States increased supply of engineers was from Australian born sources and three quarters were from overseas born sources, a pattern that was Australia wide. In 2006, overseas born engineers were 39.2% of the Territorys supply of engineers and these changes increased this share to 48.2% in 2011. Nationally the share of overseas born engineers in 2011 was 53.9%. The demand for engineers in the Territory increased by 494 to 1,849 in 2011, equivalent to compound annual growth of 6.4%, well above national growth but lower than the growth in Territory supply. Proportionally there was more full time employment and less part time employment in the Territory than nationally in both 2006 and 2011. In 2011, 89.2% of men and 73.2% of women worked full time and 10.8% of men and 26.8% of women worked part time. Despite the high proportion of women employed part time, numerically almost 3 times as many men as women were part time. With demand growth slightly less than supply growth, unemployment of engineers increased from 1.0% in 2006 to 1.7% in 2011. Both the 2006 and 2011 unemployment rates for Australian born engineers were consistent with frictional unemployment, the short periods of unemployment that

accompanies transition between jobs. This was also the case for overseas born men but not for overseas born women who experienced an unemployment rate of 3.8% in 2011. The proportion of the Territory supply of engineers employed in engineering work was above national benchmarks in 2006 but fell in 2011 to 62.6% with the fall attributable to the increase in overseas born engineers. In contrast the figure in Western Australia was 69.5%. Engineers are employed in every industry but five industries accounted for over 80% of the Territorys increase in the employment of engineers. These included the electricity, water, gas and waste utilities (22.7% of the Territory increase), engineering consulting (21.6% of the Territory increase), construction (13.5% of the Territory increase), transport, postal and warehousing (13.1% of the Territory increase), and manufacturing (9.2% of the Territory increase). Mining increased its employment of engineers by over 40% but this was just 4.5% of the Territory increase. Other industry employment changes were much smaller and widely distributed.

BACKGROUND Statistics on trends in the engineering labour markets in the States and Territories are limited and detailed statistics are simply unavailable, except for the ABS census. In 2011, a series of limited statistics from the 2006 census were released as complements to that years Statistical Overview1 and earlier this year a Policy Note was released on State engineering labour markets drawing on statistics from the ABS survey of education and work2. The ABS has now made available the necessary statistics from the 2011 census and comparisons between these statistics and corresponding ones from the 2006 census can yield up to date information on the major changes in State and Territory engineering labour markets and the relationship between these changes and national ones. This Policy Note considers changes in the Northern Territory engineering labour market.

KEY STATISTICS A substantial part of the discussion is based on the statistics in Table 1. The Table includes statistics on all major labour force variables as well as the engineering population in the Northern Territory for the 2006 and 2011 population censuses. The statistics are defined to be consistent with Engineers Australias view on qualifications essential for membership of the engineering team; that is, at least an Advanced Diploma or Associate Degree in engineering. In the framework used, the engineering population is the segment of the Australian population that is qualified in engineering. Conventional ABS definitions for labour force status and other labour market variables are used. The Table covers both men and women and distinguishes between people born in Australia and born overseas. Although the stock of overseas born engineers includes people who arrived in Australia many years ago, and possibly as children, almost all the change in
www.engineersaustralia.org.au, The Engineering Profession; A Statistical Overview, Eighth Edition, 2011: See also The Engineering Profession, A Statistical Overview Western Australia 2011 and the corresponding publications for other States and Territories on the same web site. 2 www.engineersaustralia.org.au State Engineering Labour Markets in 2012, September 2012
page 2
1

this segment between 2006 and 2011 can be attributed to recent skilled migration. Comparative national statistics are contained in a separate Policy Note3.

Table 1: The Northern Territory Engineering Labour Markets in the 2006 and 2011 Censuses 2006 Census Labour force status Employed FT Employed PT Employed away TOTAL EMPLOYED Unemployed (FT) Unemployed (PT) TOTAL UNEMPLOYED LABOUR FORCE Not in labour force ENGINEERING POPULATION Participation Rate (%) Unemployment Rate (%) Employed in Engineering % in Engineering 2011 Census Employed FT Employed PT Employed away TOTAL EMPLOYED Unemployed (FT) Unemployed (PT) TOTAL UNEMPLOYED LABOUR FORCE Not in labour force ENGINEERING POPULATION

Australian Born Men Women Total 663 38 701 74 13 87 32 5 37 769 56 825 5 0 5 2 0 2 7 0 7 776 56 832 53 18 71 829 74 903 93.6 0.9 528 68.0 75.7 0.0 36 64.3 92.1 0.8 564 67.8

Overseas Born Men Women Total 397 40 437 52 14 66 27 0 27 476 54 530 3 0 3 3 0 3 6 0 6 482 54 536 57 12 69 539 66 605 89.4 1.2 301 62.4 81.8 0.0 23 42.6 88.6 1.1 324 60.4

Engineering Team Men Women Total 1060 78 1138 126 27 153 59 5 64 1245 110 1355 8 0 8 5 0 5 13 0 13 1258 110 1368 110 30 140 1368 140 1508 92.0 1.0 829 65.9 78.6 0.0 59 53.6 90.7 1.0 888 64.9

712 85 71 868 7 4 11 879 80 959

68 18 9 95 0 0 0 95 17 112

780 103 80 963 7 4 11 974 97 1071

672 83 29 784 14 3 17 801 62 863

63 30 9 102 4 0 4 106 21 127 83.5 3.8 39 36.8

735 113 38 886 18 3 21 907 83 990 91.6 2.3 491 54.1

1384 168 100 1652 21 7 28 1680 142 1822 92.2 1.7 1071 63.8

131 48 18 197 4 0 4 201 38 239 84.1 2.0 106 52.7

1515 216 118 1849 25 7 32 1881 180 2061 91.3 1.7 1177 62.6

Participation Rate (%) 91.7 84.8 90.9 92.8 Unemployment Rate (%) 1.3 0.0 1.1 2.1 Employed in Engineering 619 67 686 452 % in Engineering 70.4 70.5 70.4 56.4 Source: Compiled using the ABS TableBuilder Pro Facility

THE SUPPLY OF ENGINEERS The supply of engineers is the number of engineers actively participating in the labour market. It comprises the sum of engineers who are employed and engineers who are unemployed and actively seeking work. The supply of engineers is related to the engineering population by the participation rate. In 2006, the Northern Territorys engineering participation rate was 90.7%, the highest in Australian and over six percentage points higher than the next highest, Western Australia whose participation rate was 84.3% and even higher than the national rate of 81.7%. The participation rate in the Territory increased to 91.3% in 2011 while the national rate almost marked
3

www.engineersaustralia.org.au, How the Australian Engineering Labour Market Has Changed: A Comparison of 2006 and 2011 Census Statistics, 14 November 2012
page 3

time, increasing marginally to 81.8%. This situation reflects the pressures of skill shortages in the Territory and the engineering labour market has adjusted to the situation by a higher proportion of qualified engineers actively participating in the labour market. This effect is similar to the pressures that increased participation in Western Australia. The supply of engineers in the Northern Territory increased from 1,368 in 2006 to 1,881 in 2011, an increase of 513 or 37.5%. This change was less than 1% of the increase in the national supply of engineers and was equivalent to annual compound growth of 6.6%, above national growth of 5.6% per annum. In comparison, the fastest growth in the supply of engineers occurred in Western Australia with compound 9.1% per annum and in Queensland with compound 7.1% per annum. In 2006, there were 110 women engineers, 8.0% of the Territorys supply of engineers. Growth over the five years to 2011 increased numbers to 201 or 10.7% of the Territorys supply. In 2011, the national womens share of the supply of engineers was 11.8%.

Figure 1: The Sources of Changes in the Northern Territory Supply of Engineers

Australian born men Australian born women 10% 20% Overseas born men Overseas born women

8%

62%

The sources of the increase in the Northern Territorys supply of engineers are illustrated in Figure 1. The changes in the Territory followed the national trend where about three-quarters of the increase in the supply of engineers was from overseas born sources, primarily from recent skilled migration, and one quarter was from Australian born sources. The number of Australian born men increased from 776 in 2006 to 879 in 2011, an increase of 103, equivalent to annual compound growth of 2.5%. This change accounted for 20% of the Territorys increase in the supply of engineers. The number of Australian born women increased from 56 to 95 in 2011, an increase of 39. Despite the small numbers this was equivalent to annual compound growth of 11.2% and accounted for 8% of the increase in the Territorys supply of engineers.
page 4

The number of overseas born men increased from 482 to 801 in 2011, an increase of 319 and equivalent to annual compound growth of 10.7%. Overseas born men accounted for 62% of the increase in the Territorys labour supply. The number of overseas born women increased from 54 to 106 in 2011, an increase of 52 and equivalent to annual compound growth of 14.4%

THE DEMAND FOR ENGINEERS The demand for engineers is measured by employment. In the Northern Territory, the demand for engineers increased from 1,355 in 2006 to 1,881 in 2011, an increase of 494 or 36.5% and equivalent to annual compound growth of 6.4%. This was higher than national growth of 5.5% per annum. The distribution of the increase in employment followed the distribution of the increase in the supply of engineers and comprised 20.0% of Australian born men, 7.9% of Australian born women, 62.3% of overseas born men and 9.7% of overseas born women. In several segments, annual compound growth in demand was less than annual compound growth in supply. In the Northern Territory, there was proportionally more full time employment and proportionally less part time employment than at the national level. In 2006, 89.4% of men and 74.3% of women were employed full time and 10.8% of men and 26.8% of women were employed part time. The corresponding national statistics were for men 88.7% full time and 11.3% part time and for women, 74.7% full time and 25.3% part time. These figures were comparatively stable for men between census years both in the Territory and nationally but the proportion of full time work fell and the proportion of part time work increased. In 2011, the proportion of full time employment for women engineers in the Territory fell to 73.2%, compared to a fall to 72.8% nationally, and the share of part time employment increased to 26.8% in the Territory compared to 27.2% nationally.

UNEMPLOYMENT In 2006, there were only 13 unemployed trained engineers in the Territory, giving an unemployment rate of 1.0%. When these numbers were distributed across segments of the labour supply, it showed no unemployment among women engineers and unemployment rates of 0.9% and 1.2%, respectively for Australian born and overseas born men. These rates are consistent with what economists describe as frictional unemployment, the short periods of unemployment consistent with transition between jobs. Slower growth in demand than supply has meant that unemployment of engineers has increased in the Northern Territory in 2011. The number of unemployed increased to 32 and the unemployment rate to 1.7%. The larger numbers showed up differential impacts that were similar to the national pattern. Among Australian born engineers, the unemployment rate for men increased to 1.3% and there was no unemployment for women. Among overseas born engineers, the unemployment rate for men increased from 1.2% to 2.1% but the rate for women increased from zero to 3.8%. All unemployment rates remained consistent with frictional unemployment except for overseas born women. Unemployment for this group was at the margin of frictional unemployment.

page 5

EMPLOYMENT IN ENGINEERING Engineering qualifications are not a guarantee that individuals are employed in engineering. Earlier research by Engineers Australia showed that in 2006, 60.9% of the supply of engineers is employed in engineering work4. In the Northern Territory, the proportion of the supply of engineers employed in engineering was relatively high at 64.9%. By 2011; the national figure had increased to 62.1% but there the Territory figure had fallen to 62.6%. The highest shares of engineering supply employed in engineering were in Western Australia with 69.5% and in Queensland with 68.3%. Key factors underpinning the fall in the Territory figure are gender and ethnicity. In 2006, 65.9% of men were employed in engineering work compared to 53.6% of women. The low share of women skewed the composite outcome towards the figure for men. Similarly, 67.8% of Australian born engineers were employed in engineering work compared to 60.4% for overseas born engineers. By 2011, the proportion of men engaged in engineering had fallen to 63.8% and the proportion of women to 52.7%. This result can be attributed to the higher proportion of overseas born engineers; among Australian born engineers 70.4% were engaged in engineering work with almost identical figures for men and women; among overseas born engineers 56.4% of men were engaged in engineering work and only 36.8% of women.

INDUSTRY DISTRIBUTION The industry distribution of the employment of engineers in 2006 and 2011 in the Northern Territory and how it has changed is shown in Table 2. The Table measures change in two ways; first, the proportional changes in employment in each industry between the 2006 and 2011 censuses are calculated for men, women and the two genders combined; second, each industrys share of the increase in engineering employment in the Territory between 2006 and 2011 is calculated for each gender and engineers overall. Territory engineers were employed in every industry in the ABS classification system in both 2006 and 2011. The two largest employers of engineers in 2006, public administration and safety (includes defence) and professional, scientific and technical services, engineering consulting for short, retained their relative standing but with quite different experiences over the five years examined. Five industries accounted for over 80% of the increase in the Territorys employment of engineers; engineering consulting, the electricity, water, gas and waste utilities, construction, transport, postal and warehousing and manufacturing. The largest increase in employment occurred in the electricity, water, gas and waste utilities where employment increased from 32 (27 men and 5 women) to 143 (117 men and 26 women) accounting for 22.7% of the Territory increase in employment. In engineering consulting, employment increased from 193 (174 men and 19 women) to 299 engineers (264 men and 35 women) accounting for 21.6% of the Territory increase.

See Engineers Australia, The Engineering Profession: A Statistical Overview, Ninth Edition, 2012, www.engineersaustralia.org.au
page 6

Table 2: Changes in Northern Territory Industry Distribution of Engineering Employment 2006 Census 2011 Census Men Women Total Men Women Total Agriculture, Forestry and Fishing 24 0 24 17 0 17 Mining 71 8 79 100 11 111 Manufacturing 94 11 105 142 8 150 Electricity, Gas, Water and Waste Services 27 5 32 117 26 143 Construction 55 7 62 123 5 128 Wholesale Trade 16 0 16 20 3 23 Retail Trade 35 7 42 49 11 60 Accommodation and Food Services 19 6 25 34 18 52 Transport, Postal and Warehousing 177 12 189 236 17 253 Information Media and Telecommunications 13 3 16 13 6 19 Financial and Insurance Services 6 0 6 11 0 11 Rental, Hiring and Real Estate Services 6 0 6 9 5 14 Professional, Scientific and Technical Services 174 19 193 264 35 299 Administrative and Support Services 30 0 30 41 7 48 Public Administration and Safety 396 17 413 325 26 351 Education and Training 34 4 38 47 12 59 Health Care and Social Assistance 20 6 26 39 9 48 Arts and Recreation Services 14 3 17 15 0 15 Other Services 20 0 20 36 0 36 Inadequately described & not stated 17 0 17 9 0 9 Total 1248 108 1356 1647 199 1846 Source: Compiled using the ABS TableBuilder Pro Facility Industry Change 2006-11 (%) Share of Change(%) Men Women Total Men Women Total -29.2 0.0 -29.2 -1.8 0.0 -1.4 40.8 37.5 40.5 7.3 3.3 6.5 51.1 -27.3 42.9 12.0 -3.3 9.2 333.3 420.0 346.9 22.6 23.1 22.7 123.6 -28.6 106.5 17.0 -2.2 13.5 25.0 0.0 43.8 1.0 3.3 1.4 40.0 57.1 42.9 3.5 4.4 3.7 78.9 200.0 108.0 3.8 13.2 5.5 33.3 41.7 33.9 14.8 5.5 13.1 0.0 100.0 18.8 0.0 3.3 0.6 83.3 0.0 83.3 1.3 0.0 1.0 50.0 0.0 133.3 0.8 5.5 1.6 51.7 84.2 54.9 22.6 17.6 21.6 36.7 0.0 60.0 2.8 7.7 3.7 -17.9 52.9 -15.0 -17.8 9.9 -12.7 38.2 200.0 55.3 3.3 8.8 4.3 95.0 50.0 84.6 4.8 3.3 4.5 7.1 -100.0 -11.8 0.3 -3.3 -0.4 80.0 0.0 80.0 4.0 0.0 3.3 -47.1 0.0 -47.1 -2.0 0.0 -1.6 32.0 84.3 36.1 100.0 100.0 100.0

Table 3: The Proportions of NT Engineering Employment Engaged in Engineering Work (%) Industry Agriculture, Forestry and Fishing Mining Manufacturing Electricity, Gas, Water and Waste Services Construction Wholesale Trade Retail Trade Accommodation and Food Services Transport, Postal and Warehousing Information Media and Telecommunications Financial and Insurance Services Rental, Hiring and Real Estate Services Professional, Scientific and Technical Services Administrative and Support Services Public Administration and Safety Education and Training Health Care and Social Assistance Arts and Recreation Services Other Services Inadequately described & not stated Total Source: Compiled using the ABS TableBuilder Pro Facility 2006 54.2 82.3 69.5 68.8 71.0 56.3 7.1 0.0 80.4 18.8 50.0 0.0 83.9 50.0 68.0 47.4 38.5 0.0 30.0 52.9 65.5 2011 88.2 77.5 60.0 81.1 68.0 52.2 0.0 5.8 77.1 26.3 27.3 0.0 83.3 52.1 69.2 40.7 18.8 0.0 36.1 33.3 63.8

The construction industry more than doubled increasing the employment of engineers from 62 (55 men and 7 women) to 128 (123 men and 5 women) accounting for 13.5% of the Territory increase. The third largest employer of engineers in the Territory is the transport, postal and warehousing industry where employment increased from 189 (177 men and 12 women) to 253 (236 men and 17 women) and accounted for 13.1% of the Territory increase.
page 7

Manufacturing industry is not as large in the Territory as in some jurisdictions but employs a significant number of engineers. Employment increased from 105 (94 men and 11 women) to 150 (142 men and 8 women) and accounted for 9.2% of the Territory increase. The mining industry is often mentioned when the topic of skill shortages comes up. In the Territory, the employment of engineers in mining increased from 79 to 111, contributing 6.5% to the increase in employment of engineers in the Territory. Public administration and safety was the largest employer of engineers in the Territory in both 2006 and 2011, however, this industry experienced a fall in the number of engineers employed from 413 (396 men and 17 women) to 351 (325 men and 26 women). Engineers are employed in engineering work in every industry but the proportions vary radically from industry to industry. The key industries in the Northern Territory where the proportions of engineers engaged in engineering work are high and above the States benchmarks are engineering consulting (83.9% engaged in engineering work in 2006 and 83.3% in 2011); mining (82.3% and 77.5%, respectively); the electricity, water, gas and waste utilities (68.8% and 81.1%, respectively), construction (71.0% and 68.0%, respectively), transport, postal and warehousing (80.4% and 77.1% respectively) and public administration (68.0% and 69.2% respectively). In many industries that employ significant numbers of trained engineers, the proportion of these individuals employed doing engineering work is lower than the State benchmark, particularly low in a few cases. Further work is necessary to understand this situation, in particular how it relates to career progression and its impact on skill shortages.

CONTACT: Andre Kaspura, Policy Analyst, Policy and Public Relations, Engineers Australia akaspura@engineersaustralia.org.au (02) 62706581
page 8