Engineers Look to New Areas of Opportunity 1

Wednesday, July 8th, 2015
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Newly reinvigorated building markets on the eastern seaboard are becoming the focus of opportunities in an Australian engineering market that is being severely impacted by a capital expenditure slowdown but is seeing green shoots emerging in a number of areas.

To be sure, the pull-back in the resources investment is biting hard. In May, Worley Parsons announced write-offs of $125 million and 2,000 further job cuts as it resizes and restructures to adjust to the reality of weaker mining activity.

Major civil contractors in Queensland are being urged to look for opportunities in New South Wales as work on oil and gas projects drops off.

Over the next two years, participants in the most recent Australian Industry Group/Australian Constructors Association survey expect the value of work to plummet in areas such as oil and gas, power and electricity, water and sewerage, mining and minerals processing, chemical and petrochemical plants, petrochemical plants and warehouse and industrial plants.

Cancellations of major developments such as the $20 billion Arrow Energy liquefied natural gas project and $10 Dudgeon Point coal terminal in Queensland has sapped confidence.

Much uncertainly also now surrounds some fields that were previously slated to be areas of strength. In Victoria, for instance, the cancelled East West Link project has left a gaping hole in that state’s short-term infrastructure program notwithstanding work associated with a crossing removal program, upgrades to the critical Cranbourne/Pakenham outer eastern transport corridor and intentions regarding the metropolitan rail link. Compared with 2014/15, that state’s capital spending program will be down by more than $400 million in the coming financial year.

In Queensland, much uncertainty surrounds the near term future of the capital program in that state as the current government is yet to lay out its major transport plans.

Against this, however, the positives on the other side of the ledger continue to stack up. Sky-high levels of building approvals suggest the record-breaking pace of new developments in apartment tower design and construction will not slow down any time soon.

While work is slow on office and public buildings, momentum appears to be building in other areas of non-residential building activity as the low dollar spurs retail and tourism related activity. In that other critical area of boom – transport projects in Sydney – the news just keeps getting better. Windfall gains in areas like stamp duty have allowed the state government to bring forward $590 million to kick start a number of new infrastructure projects, including the Sydney Metro, Parramatta Light Rail, rapid bus transit and healthcare and road projects. The recent passing of legislation needed to privatise electricity assets in order to free up funds provides much needed certainty that much of the planned infrastructure program will indeed go ahead.

Because of this, the jobs market for engineers is stabilising. Having previously shrunk during virtually every month over the past two years prior, vacancies in the engineering sector rose on an aggregate basis throughout Australia in each of the first four months of this year, Department of Employment figures show. This news comes despite employment conditions continuing to deteriorate in resource states and trend level vacancies having shrunk by more than two-thirds since the mining boom peak in 2012.

In its most recent quarterly report, recruitment outfit Hays said the start of the year has seen improving levels of confidence, increasing recruitment of both permanent and temporary staff, strong salary negotiation outcomes and new bonus structures being put in place.

Hays says there are healthy levels of demand for HVAC and hydraulic engineers, Revit drafters and modellers, civil designers, transport engineers and mid to senior level structural engineers.

apartment - engineering

Apart from the domestic market, the signing of the Free Trade Agreement with China creates an enormous area of opportunity for major outfits in areas such as the design and construction of apartments, commercial buildings and civil projects in the world’s fastest growing big building market. Given the healthy levels of regard for Australian design professionals, an agreement between the two countries to encourage mutual recognition of each other’s professional qualifications, too, should open up enormous opportunities for Australian building designers.

Outside of market conditions, a key area of interest for engineers especially in New South Wales revolves around a fundamental review of the Building Professionals Act 2005, which will look at how the Act is performing in that state and identify ways in which building regulation and certification arrangements can be improved.

In a recent News Ltd report, Charles Rickard, a consulting engineer at RH Consulting Engineers, said the certificates issued under the Act are a ‘joke’ and that poor wording has led to defective and unsafe construction.

Submissions for feedback on a discussion paper about the reform process closed on June 12, while a draft report will be published later this year.

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  1. Ross Brown

    In my experience, the majority of certificates issued in the NSW building industry today are worth far less than the paper they are printed on.

    Serious and substantive reform is required before end users of construction can have any faith in the NSW construction industry in the foreseeable future.

    Sadly, such reform is unlikely to arrive anytime soon.