Friday, October 12, 2012

What recent news really means for engineering jobs in Australia

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Iron Ore price may have jumped, but the  big picture 
offers less cause for confidence. 
Recent surges in iron ore prices may be a comfort to some, but before anyone starts getting too excited, they should look to the wider view and the inevitability of long term decline in need from China.

This month the news is good. A 6.7% jump resulting from news of approvals in Chinese Infrastructure projects. It’s enough to put the price back over $100 a tonne, which though well short of the $150 high, is at least over the recent $90 level.

There remains however, an inevitable truth to be faced. China’s economy is shifting. As the Chinese population starts to consume more of its own products, rather than relying on external markets for exports, its need for steel and the raw materials used to produce it, will drop and drop.

Steel futures in Shanghai are dropping as we speak. While China continues to overproduce steel, the $150bn in approved projects will not be enough to build confidence in future need. Only cuts in production at Chinese steel mills will stabilize the price.

But in a market that’s seriously fragmented who’s going to do that? Who’s going to compromise their market share? And what are the state run facilities going to do about the jobs it will cost? The answer is that everyone is going to hope for a solution somewhere else in the supply chain.

Today Fortescue will ask lenders to waive debt covenants. As the world’s fourth largest iron ore producer, the company is suffering severely from the weak demand in China, its largest market. Fortescue has avoided raising equity capital, hoping instead for a rebound in commodity prices.  

Meanwhile, confusion reigns in India. In Goa, ‘serious illegalities and irregularities’ in mining operations have led to a freeze in production, as New Delhi continues to seek drops in exports to fulfill domestic need. India’s exports to China have dropped significantly – by 40% April - June.

So what does all this mean for the Australia mining job market? Time will tell, but the outlook is not immediately positive. It is the demand for minerals that has protected the Australian economy from the worst of the global financial crisis. But the fall in commodity prices, the closure of mines and - most significantly for engineers – the postponement and cancellation of expansion plans, will start to pull this protective blanket off the national economy.

The good news is that not everything is about mining projects.  Demand for engineers on LNG projects remains strong and our clients have continued to seek talent for ongoing expansion. As one door closes another one opens.

But there is a truth to face here – China will not be the magical bodyguard of the Australian economy forever. 

Friday, August 24, 2012

Qatar rail jobs represent great opportunities for Australian engineers

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The first contracts for one of the largest engineering jobs in Qatar in recent years were awarded this week and the news is a reminder to Australian engineers that rail projects in Qatar will deliver a great many engineering job opportunities.

In all US$36bn of contracts will be awarded as Qatar seeks to transform its rail infrastructure in the run up to the FIFA World Cup in 2022.

Egis Rail and Jacobs are among the early winners, taking the project management and engineering contracts for the red and gold lines. Hill will manage the third green line.

Leighton, who have the contract to build a battery operated tram system to move students around Doha Education city, are hopeful that this role will open up opportunities on the main Doha Metro.

Elsewhere in Qatar, Lusail City’s light-rail transit system is expected to be finished in August 2016

Rail forms a key element of a massive expansion in Qatar. Construction activity involves four central projects: those planned for the World Cup; the $11bn Doha Airport (in two sections from 2012 to 2015.) Thirdly, $8bn Doha Port, to be completed in 2016 for phase one, with total completion in 2030.

All this is in addition to the $25bn of rail expenditure.

Across the GCC region, rail projects are plentiful. In Saudi, Construction has begun on the first high speed passenger line between Makkah and Madinah which is expected to be complete by January 2014. New railway and expansion rail jobs currently in process in the kingdom include North-South Rail, the Land-bridge Project (between Riyadh and Jeddah), and the GCC Railway, which is set to connect the six GCC members - Kuwait, Bahrain, Qatar, UAE, and Saudi Arabia, and Oman.

75% of Qatar’s revenues for this investment  come from it’s oil and gas sales, bolstered of late by increases in LNG exports, the revenues of which will leave the country with a comfortable budget surplus, regardless of their plans for all of this additional sustained expenditure.

All of this paints a fairly clear picture: if you’re thinking of an expat life style but you had ruled out the Middle East (based on perceptions of what it would be like to work in the region) you should take another look at Qatar.

Qatar plays host to large numbers of Commonwealth expats; and growing numbers of foreigners are working in Qatar to save money in the tax-free environment, and maintain a standard of living and wealth comparable to home. The kicker? Qatar has the highest per capita income in the world.

What’s not to like?

See immediate open Qatar Rail jobs.

Thursday, August 16, 2012

No end in sight for Australian LNG jobs as US check book remains on the table

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We get a lot of questions about the future of LNG for Australian engineering jobs. And I do mean a lot. Few things seem to occupy the minds of our industry colleagues across the world as much as the potential that LNG projects represent for the Australian economy and for the immediate future of global engineering jobs. Not since the 2003 spike in inquiries provoked by the Iraq reconstruction project, or the mass interest in building jobs for the London Olympics have I seen this much interest on one area of the global industry.

For now, Australia is at the centre of the engineering world. And it is foreign investment from the USA that is really driving the expansion, with relatively little of the money coming from China. 

Fred Hochberg, Chairman of US Ex-Im bank and a close economic advisor to President Obama has been in Australia this week to enforce the US’s commitment to sustained investment in the region, in the face of renewed efforts from China to lead spending over here.

"US investment is frankly far greater than any Chinese investment in Australia - it's the No 1 source of FDI (foreign direct investment) into Australia," said Hochberg while visiting Australia Pacific LNG on Curtis Island.

So America’s message is clear – We want you to know we care about you. Low interest loan money currently flooding in from the US is a clear signal that the US sees Australia as a safe bet for the long term. Investments from Ex-Im have been welcomed far more readily here than those coming in from China. The low interest loan money is linked to projects with heavy involvement from US companies like Bechtel and GE, so it’s a popular strategy within the US.

Cumulative US investment topped $550bn in Australia over the last seven years, compared with just $21b from China, Chevron's decision to push forward with its gigantic Gorgon and Wheatstone projects in Western Australia is a significant driver of this investment.

To justify this level of expenditure, we have to supply the human capital to get the jobs done. Where are the skilled labor jobs and engineering jobs going to be filled from?

The reality is that just as the investment money is coming from the US, a lot of the skills we need will have to come from outside too. If we handle it right, it will be good for us in the long term. 

We need to bring in resources from outside Australia to execute projects now and to help train and develop the next generation of Australian engineers who can fill engineering jobs in LNG for the next decade. The time is now. 

Tuesday, July 24, 2012

Never mind Lara and the tourists, where the bloody hell are the engineers?

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Lara Bingle enticed tourists to Australia in 
the famous ad
So the papers are all up in arms this week over the defection of Lara Bingle, the model who promoted Australian tourism in the famous and sometimes controversial  Where the bloody hell are you?’ ad.

Lara’s talents, it seems, are for sale to the highest bidder. In this case New Zealand. Fair enough; the woman is a professional, let her take work wherever she can find it. The job market for models, like any other profession, is international.

I don’t think we’re suffering too much. Six million tourists visited our shores over the last year, a 0.5% increase on the previous year. Considering the economic state of the countries that yield a lot of our tourism dollars, we should be glad of these numbers. Especially while Europe is still frantically searching under the sofa for its lost credit card, and the Americans are on self imposed lock down.

Let’s face the fact that tourism is far less of an issue right now than encouraging the right number of high skilled migrants to move here for long term temporary assignments and fill some empty Australian engineering jobs.

Australia will become the world's biggest liquefied natural gas producer, by 2020 as it unlocks its 100 year reserves. Analysts predict it will soon overtake current leader Qatar.

Seventy percent of the world's 10 major LNG projects are under construction here and billions are being spent on infrastructure year on year.

The biggest threat to achieving this growth and all the benefits that come with it is people. We don’t have the engineering skills in the quantity we need them in house and we need to look overseas for them now. We need to look to the UK and Europe to build our engineering workforces and absorb the key skills into the Australian population in greater numbers.  

So if you see Lara, tell her to find a drawing board and a hard hat and make Australian engineering jobs sound sexy and exciting. Australia may need her yet. 

Friday, July 20, 2012

The skills crisis is very real. Although for most, the solutions remain imaginary.

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More needs to be done to meet the demand for highly-skilled workers and to prevent increases in youth unemployment, according to a statement released today by the Government's workforce and productivity agency.

Terrific. That’s that sorted then. Who’s for a beer?

This year-long study, which may just as well be subtitled ‘how I learned to stop worrying and state the obvious’ is only addressing a small proportion of the overall problem.

It’s all well and good to talk about the need for training, it is true that only proper teaching and apprenticeship programs can develop the skilled labor we need. But our real problems lie the other side of the line where training becomes education, where training involves spending years at university getting an engineering degree and then building a few years experience on projects. These are the people we need, and you can no more train people to achieve this status than you can train someone to be a doctor. Both things take a comparable amount of time.

There’s a lot of rubbish talked by analysts who point to the fact that we have 350,000 engineers and 325,000 engineering jobs, but this is entirely the wrong measure of the situation.

The relevant figures are all related to slow growth.  On average Australia produces 9,500 engineers each year and loses 4,500 to retirement, creating an average net increase of about 5,000.

That doesn’t sound so bad, until you consider that over the last decade, the additional demand for Australian engineers averages 13,000 each year and has reached over 20,000 on occasions.  The result is a major deficit that threatens the completion of key projects. It is these projects that have proofed Australia from the worst of the global recession. Our LNG infrastructure must continue to develop to capitalize on the business available from emergent markets. This means engineers, lots of them and a sensible plan for getting them in place.

We must develop a long-term, sustainable strategy, including intake and education. We must also banish our reluctance to hire expertise in from the rest of the world.

We have little to lose now in the long run from filling the critical Australian engineering jobs from the UK, USA or even the Philippines. We have a great deal to lose if our national project portfolio continues to buckle under the weight of our current problems.

Trevor Burne is Managing Director of Talascend. He blogs about Australian engineering jobs, and issues affecting Australian Engineers.

Wednesday, June 27, 2012

As our immigration debate rages, cooler heads look to the UK

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The UK engineering media is buzzing with Australia stories. The word is out that we are the hot ticket for British workers looking for lucrative Australia engineering jobs.

Immigration remains a sensitive issue for a lot of Australians. It’s easy to understand why, given the speed at which the population is evolving. Last year’s census revealed that there are now 21.7m people in Australia, which is a 9% increase from the 2006 figures.

2011 census data shows a steep climb
in immigration
This week we’ve seen the perils of illegal immigration and the tragic risks to which people are prepared to expose themselves to get here. This is a serious discussion and it’s happening in parliament as we speak; it’s beyond my pay grade and I’ll leave it to the people best placed to resolve the many issues associated with it.

Let’s talk about a different kind of immigration; let’s talk about white collar workers, those with advanced, critical skills and where we’re going to find them.  

We all know the background. Massive increases in demand for our natural resources from fast-growing economies with substantial populations are creating tremendous urgency to develop the infrastructure that can help meet demand. We have the buyers, we have the product; the hard part is finding the engineering professionals to get the job done.

The solution lies in bringing in contract workers on long term assignments and ensuring that the skills we bring into Australia temporarily remain here permanently through training and engagement.

We’ve never had such strong opportunities to attract engineers from the UK for example. Our brand as a country of opportunity is growing there more than ever. Every economy in the world is either suffering, or recovering from, a major financial crisis. Australia, in the eyes of the technical world, is boom town.

In my years working in London, I never encountered this degree of interest coming from all areas of the UK market. It’s time to take advantage of this; it’s in the long term interests of the Australian economy. The British represent the best source of long term temporary workers we’ve got. They are one of the world’s most mobile populations in professional terms, there are no language issues and there are cultural synergies that make every stage of the process easier.

If this is not a major target for you as a recruiting organization, it needs to be. It’s a very good idea to have a specific staffing strategy right now. There’s a lot of competition for these skills and there’s a limited talent pool anyway (as there is in every area of global engineering.)

If you’re a British engineer potentially looking for an exciting foreign opportunity, you need to make sure you’ve fully considered the Australia option. There’s a chance we may really need you out here. It’s a great place to bring your family, compared to many of the more traditional expat spots, and it’s going to be a lot easier than you think to make it a reality. 

Trevor Burne is Managing Director of Talascend. He blogs about Australian engineering jobs, and issues affecting Australian Engineers.

Friday, June 8, 2012

The biggest mistake made in meetings...

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Everyone’s an expert.

Do you ever notice that? When you’re sat in meetings on more or less any subject, the people sat round the table always seem to have plenty of opinions, often expressed with the certainty of fact, but very few have a lot of questions to ask.

I wonder why that is. In all circumstances in life where groups of people are trying collectively to reach a correct decision, the process is always question and answer based. Courtroom trials are based exclusively on questions and answers, as are committee hearings, enquiries and tribunals.

Asking questions is not just a practical necessity, it’s also a basic human courtesy. It’s the foundation of human interaction, for strangers as much as for old friends.

Do you come here often? What team do you support?  How are Mary and the kids?

Virtually all conversations are question and answer led, until you’re in a meeting room with eight of your colleagues. Then suddenly everyone seems far more interested in asserting their own opinion than they are in soliciting someone else’s.

Why do we indulge this? The most awful people we meet socially are those who never ask questions. You know the type. You’re at the pub and every time a line of conversation emerges, this person can only reference it in some way back to themselves. They are not interested in taking in, only in giving out.

“I’m very excited, I’m going to Tunisia next month.”
“I went to Tunisia last year.”

“I just got a text from my friend, she’s living in London at the moment.”
“When I was living in London I found the weather was just too much.”  

It’s easy to do. Relating things back to personal experience is natural, but it’s also intrinsically selfish and a real social turn off. How much better is it to ask questions? Imagine if the same person answered each statement with a question…

“I’m very excited, I’m going to Tunisia next month.”
“Really? Why did you choose Tunisia?”

“I just got a text from my friend, she’s living in London at the moment.”
“Where abouts is she staying?”

A person who asks questions is immediately more likable and will ultimately accomplish more. Asking questions makes the person you’re talking to feel like you’re interested and it gives you more information. When it comes to business, information is almost always useful in making progress and problem solving.

We all need to ask more questions and listen to the answers. There is a danger that you're asking less questions than you actually think you are. Paying close attention to how you behave, and whether you're a listener or a talker is very important. As an old poker-playing friend of mine says, if you look round the table and you can't see who the loser is, then it's you.

What do you think?

Trevor Burne is Managing Director of Talascend. He blogs about Australian engineering jobs, and issues affecting Australian Engineers.