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Demand for engineering skills rises as infrastructure investment hits record high

The demand for engineering skills is continuing to defy the otherwise weak jobs market, buoyed by a surge in infrastructure investment, according to research by the Association of Professional Staffing Companies (APSCo).

Ann Swain, Chief Executive for APSCo

The research shows that demand for engineering candidates has risen throughout the Eurozone crisis, as demand for highly-skilled candidates in other sectors falls. Vacancies for engineers were up 1% year-on-year in January for permanent candidates; vacancies for temps and contractors were up 7% year-on-year in January.

Recently released official data shows that investment in infrastructure rocketed 23.5% year-on-year to a record £3.6 billion in Q4 2011, from £2.9 billion in Q4 2010. Infrastructure investment in 2011 was at its highest level since 1980 (according to:

APSCo says that demand for engineering contractors is particularly strong in the energy sector, including oil and gas, renewable energy and power transmission. In other sectors, such as aerospace, skills shortages are still an issue.

The research is from the APSCo Monthly Trends Report, which analyses job vacancies and placements across the UK professional staffing sector. The report compares data from thousands of vacancies and placements supplied by APSCo members who place professional candidates within the UK.

Ann Swain, Chief Executive for APSCo (pictured), comments: “Engineering remains the bright spot among the professional jobs market at the moment. Crossrail is Europe’s largest construction project and has created huge demand for engineering and project management specialists. With the Government focused on boosting investment in UK infrastructure projects, demand for engineering skills should remain buoyant. The UK has a long-term shortage of engineering skills. With demand so strong, the Government needs to ensure that the UK’s historical underproduction of engineering skills does not impede growth in vitals sectors such as oil and gas and power generation. Given the supply-side constraints, and with hirers facing growing competition for skills, pressure on pay in the engineering sector is likely to intensify this year.”

According to the APSCo research, vacancies for highly skilled staff saw a double-digit fall in January as the economic uncertainty continues.

Vacancies for permanent professionals (bankers, lawyers, media executives etc.) were down by 17% year-on-year in January as businesses continued to put hiring plans to one side. Vacancies were 8% up on December, however, as the market staged its usual recovery from the quiet holiday season.

Vacancies for contractors and temporary workers were down 8% year-on-year; demand having peaked in July 2011 just before the Eurozone crisis erupted.

Swain adds: “This time last year UK businesses were far more bullish about their growth prospects and many were looking to beef-up their staff numbers in anticipation of increased demand. Employers are now very much in ‘wait and see’ mode.”

John Nurthen of Staffing Industry Analysts states: “The uncertain economic situation has dented confidence and forced many employers to keep a close eye on staffing costs. Recruiters are reporting that employers are looking for reasons not to hire at the moment and are trying to extract additional capacity from their existing workforces. All eyes will be on the first quarter GDP figures. If we avoid a double dip – which is looking increasingly likely – confidence should revive.”

According to the Monthly Trends report, vacancies in the IT sector have continued to decline quite dramatically – by 48% year-on-year for permanent candidates; by 32% year-on-year for contractors and temporary workers.

John Nurthen of Staffing Industry Analysts says: “IT staffing levels are heavily dependent on investment, but with businesses sitting on cash piles and reluctant to invest, IT recruitment has taken a knock. IT projects can take years to deliver a return on investment, and with the current focus on cash, a lot of projects have not left the planning stages.”

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