Engineer shortage to hit infrastructure projects

New Zealand will suffer a shortage of engineers and technical professionals as it embarks on multibillion-dollar infrastructure projects over the next decade, industry sources say.

The shortage could push out the timeframe and cost of some projects.

Major infrastructure schemes in the pipeline include the development of the Government's seven roads of national significance – including Transmission Gully in Wellington – the $1.5 billion ultrafast broadband rollout, and upgrades to rail and electricity transmission networks.

Institution of Professional Engineers public policy director Tim Davin said the level of activity planned over the next decade was unprecedented. "The 1990s were characterised by a relatively flat infrastructure spend, and many people regard all these projects as a catch-up."

The institute expected infrastructure spending for the next 10 years to be $6b to $7b a year nationally, compared with about $3b a year in the early 2000s.

New Zealand already grappled with a shortage of engineers in all disciplines, Mr Davin said. Under "business as usual" conditions, 2000 new engineers were typically needed each year, but only 1500 graduates entered the market. The recovery of the global economy could also see an increase in the number of skilled engineers heading overseas.

"There's a global skill shortage of engineers and to some extent we're competing with that."

Engineers could not always transfer to other infrastructure sectors, so a surplus in one sector would not necessarily offset a deficit in another, he said.

The shortage could mean projects took longer to complete, cost more than expected, or that very few suppliers bid for contracts.

Shortages would vary from sector to sector, and for some, any shortfall could be made up by bringing in people from overseas, but there was a real need to build up capability within New Zealand – something IPENZ was working towards with the Government, industry and education sector.

Rob Law MaxRecruitment senior technical consultant Daniel Hopkins said the severity of the shortage would depend on the timing of the projects.

"If the big ones hit at the one time then there's going to be severe issues with shortages of people and equipment.

"It depends on how many are coming out in one area at once. Smaller companies will be able to pick up some of the smaller contracts around.

"We're not well-equipped. It's an ongoing issue that we do have people in the country who have some skills, but there's probably not enough of them with the right ones, especially on the roading side."

The rush of projects announced had surprised the industry.

"The big ones like Transmission Gully – which has been mooted for the last 50 years – have suddenly hit the drawing board. I don't think anyone was prepared for that to come up quite this fast."

It was inevitable skilled professionals would continue to head overseas – particularly to Australia – but the projects in New Zealand could entice some back, he said.

New Zealand could look to draw in professionals from overseas, but would rely on its lifestyle to attract people, not remuneration rates.

Jane Farley, board member of the Project Management Institute, said it had established an office in Sydney to help meet anticipated demand for project managers in New Zealand and Australia over the next few years.

The institute works as a recruitment agency for project managers and advocates for the use of project managers.

New Zealand's swag of infrastructure schemes would create unusually high demand for project managers, she said. "Whether we're going to have enough of them to do all the projects being accelerated, I just can't tell you.

"There's been demand before, but probably not on quite the same scale. If you look at the information technology area, probably the last time you needed a large number of project managers for that area was during the Y2K scare."

Not everyone is convinced a shortage is nigh.

Kevin Thompson, chief executive of infrastructure consulting firm Opus International, said the roading infrastructure spend was a restoration of activity rather than an unprecedented boom and the industry would respond to any increased demand, as it had in the past.

Any shortage would present a positive challenge, he said.

"It's an opportunity to improve the capability of our industry and get more people into it."