Australia faces engineering skills crisis by 2040

Wednesday 8 March 2023

Australia faces engineering skills crisis by 2040 An independent report commissioned by Professionals Australia projects a skills shortage of 200,000 engineers by 2040, undermining vital engineering projects and economic growth unless industry and governments take urgent action to grow the engineering skills base and workforce in Australia.

The report ‘Engineering a Better Future: Australia’s Growing Crisis in Engineering Skills’ identifies failures in the education pipeline for engineers, the underutilisation of qualified engineers in the workforce, and an extremely low participation rate of women in engineering as the main reasons for the predicted shortage.

Professionals Australia’s CEO Jill McCabe said the report should raise alarm bells for governments and many industry sectors.

“A shortfall of 200,000 engineers by 2040 threatens Australia’s capacity to deliver major infrastructure projects, large-scale transformation of the energy sector and intensified technological innovation across the economy.

“Without targeted policy interventions at the federal and state levels, the shortage in engineering skills will significantly undermine Australia’s future productivity and economic growth.

Lindsay Nash, a practising civil engineer and President of the Engineering Division of Professionals Australia said three key factors were driving the engineer shortage.

“Australia is not producing enough engineers to meet our nation’s projected demands. Our current education system is failing to support a sufficient number of students to study and complete an engineering degree.

“Compared with other OECD nations, Australia trains an insufficient number of engineers, with just 8.5 per cent of Australian university graduates receiving engineering degrees compared with over 12 per cent in Canada and over 23 per cent in Germany.

“While the number of engineers trained overseas and seeking to work in Australia is growing, they face significant barriers entering the workforce, including visa-related job restrictions and a lack of local networks, and while migration has a role to play in addressing the skills gap, strategies to build the domestic engineering skills base are also required.

“Additionally, Australia’s engineering sector faces a massive issue with the underutilisation of engineering skills. Just 66 per cent of Australian-born engineers and only 49 per cent of migrant engineers are working in engineering roles.

“If Australia is to address its engineering skills shortage, it’s clear that we need to do a better job at preventing this critical skills wastage.”

Ms McCabe added that the public sector engineering workforce is at even greater risk of a severe skills shortage than the private sector and that state governments had a crucial role to play in growing and protecting public engineering workforces in their states.

“State governments can strengthen the engineering profession through engineering registration and ensuring that their public sector engineering workforce is well-resourced and funded. Ms McCabe said another major factor unpinning Australia’s engineer shortage was the extremely low representation of women in the engineering profession.

“Women are starkly underrepresented in engineering at the higher education level and in the workforce.

“Less than two in ten engineering students and professionals are female, making engineering one of the most male-dominated professions that require a university degree.

“While engineering is the largest STEM field nationally in terms of its workforce size, it has the lowest proportion of women.

“For women, the average gender pay gap is 14.1 per cent across all industries. But for women in engineering, it is around 24 per cent, which is a powerful disincentive for women to embark on a career in engineering.

“It’s clear that a significant cultural shift across the engineering sector is required to increase the participation rate of female engineers by addressing the pay gap and by improving workplace policies and practices that strengthen women’s careers in engineering.

Mr Nash said that “Efforts to bridge the looming engineering skills gap must be multi-faceted.

“We need to increase the overall proportion of engineering graduates in Australia, and this requires more support for students to not only start but complete engineering degrees.

“We also need to do a much better job of utilising the number of qualified engineers who are not working in the engineering sector.

“We must work harder to increase the number of female engineering graduates, abolish the gender pay gap and create workplaces that better support women throughout their engineering careers.

“With international demand for engineers rapidly increasing, and with training times for engineers effectively reaching up to 10 years, Australia can ill afford to prevaricate on this critical issue.

You can download the full “Engineering a Better Future: Australia’s Growing Engineering Crisis” Report here.

Media contact: Darren Rodrigo – 0414 783 405 Engineering a Better Future: Australia’s Growing Crisis in Engineering Skills Report

Key Statistics
  • Australia will be short 200,000 engineers by 2040 - Australia will experience an engineering workforce shortage of 200,000 by 2040 if new and additional measures are not put in place to grow the workforce
  • Underutilisation of engineering skills - Just 66% of Australian-born engineers and 49% of overseas-born engineers work in engineering roles.
  • Insufficient numbers of graduate engineers – Only 8.5 per cent of Australian university students graduate with engineering degrees, compared with over 12 per cent in Canada and over 23 per cent in Germany. Graduation numbers have also been stagnant since 2018 at around 25,000 per year.
  • Low engineering participation rate for women - Less than two in ten engineering students are women, and women make up only 15% of the university-qualified engineering workforce.
  • Engineering gender pay gap for women – The engineering gender pay gap is 24 per cent for women compared with 13 per cent across all industries.

Case Study: The New South Wales Engineering Workforce

  • Major Federal and State infrastructure spending – Federal, state and territory governments have allocated $248 billion in funding for infrastructure in 2020-2021 budgets over the coming four years
  • East coast infrastructure spending - Victoria and New South Wales lead the rankings of infrastructure expenditure with $90.2 and $85.6 billion, respectively, accounting for 71% of the total national infrastructure funding.
  • Crisis of the NSW public engineering sector - In 2006, 18.6% of engineers were employed in the public sector in New South Wales, dropping to 13.2% by 2021.