The engineering sector in New Zealand is currently undergoing a range of dynamic changes across its various subsectors, driven by advancements in technology, a strong focus on sustainable practices, and significant contributions to global engineering trends.

From innovative infrastructure projects and cutting-edge automation in manufacturing to the development of eco-friendly solutions and the integration of digital technologies, each subsector is evolving uniquely to meet the demands of the future.

SUBSECTOR UPDATES

Structural Steel and Construction

The structural steel industry is navigating a complex landscape. Like many industries, companies are contending with tight margins and competitive bidding wars, often accepting projects at reduced profits to keep their workforce busy.

At the same time, government initiatives, such as the NZD$22 billion construction sector transformation plan 2022-25 investment, are accelerating projects and imposing stricter completion timelines, ensuring a steady flow of work for contractors.

Additionally, we are seeing many fabrication companies diversifying into seismic strengthening projects to retain staff thus positioning themselves for future large-scale developments.

The Building (Earthquake-prone Buildings) Amendment Act 2016 mandates that buildings must meet at least 34% of the new building standard (NBS) to be considered safe.

Export Market

Our clients oriented towards exports have witnessed a surge in orders. This uptick is attributed to intensified sales efforts and favourable exchange rates, enhancing the competitiveness of New Zealand's engineering products on the global stage.

Agriculture Sector

The agricultural sector, particularly dairy and grain, is currently thriving. At Stellar, we’re seeing clients within these industries report increased demand, leading to a boost in engineering services related to agricultural infrastructure. Factors like favourable milk prices are leading farmers to feel confident to invest in upgrades and new equipment or infrastructure to drive their businesses forward.

Energy and Resources

The energy sector is undergoing rapid expansion, especially in renewables. Since November 2024, there has been a notable increase in demand within the hydro and solar energy segments. This growth aligns with New Zealand's commitment to achieving 100% renewable electricity by 2030 and net-zero emissions by 2050, prompting significant investments in sustainable energy projects and projects finally breaking ground. 

WIDER MARKET TRENDS AND TRAINING

Employment Trends

The job market reflects the sector's dynamic nature. Recent SEEK, Trade Me and LinkedIn data indicates a 20% increase in engineering-related job listings (since Aug 2024), suggesting optimism and a growing demand for engineering tradesmen.

Apprenticeships and Training

Apprenticeship programs are facing retention challenges. For instance, in Canterbury, Ara Institute commenced 2024 with 20 candidates in their engineering pre-trade program, but only 8 completed it, with similar trends reported nationwide.

Additionally, I requested data from NZQA on engineering apprenticeship statistics, which show a 16.7% decline in graduates between 2021 and 2023. They anticipate a further decline in 2024; however, numbers are not yet available. This reduction raises concerns about the future supply of skilled tradespeople in the engineering sector.

Emigration Trends

Conversations with potential candidates, corroborate the noticeable trend of engineering individuals emigrating for better remuneration packages. Countries like Australia remain attractive destinations due to their competitive salaries with Statistics NZ reporting a net migration loss of 27,000 people to Australia in 2023.

This migration underscores the need for New Zealand employers to reassess compensation structures and career development opportunities to retain skilled engineers.

Conclusion

The engineering sector in New Zealand is at a pivotal juncture, with certain subsectors experiencing growth driven by government investments and renewable energy projects, while others face challenges related to economic conditions and workforce retention.

If you need information more specific to your engineering subsector, please contact Shekinah Bramwell.