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Local engineers under the pump

A LACK of investment in the State’s mining and resources sector and a slowing of public sector infrastructure developments are the most significant factors contributing to the tough business climate being experienced by consulting engineers, according to GRD Minproc general manager Mal Brown.

“A significant portion of the WA economy, and hence the engineering industry, depends on the level of activity in these two sectors (mining and infrastructure development),” Mr Brown said. “The slowdown in the world economy has impacted on the volume of work being undertaken and this is a situation that is unlikely to change significantly for another 12 to 18 months.”

Recent uncertainty over the stability and direction of the Australian and global economies has resulted in several significant projects remaining in a state of flux, as organisations assess the direction of the market and the viability of these projects.

This is particularly evident in the mining and resources sector, where the slowdown in the world economy, falling commodity prices, a downturn in exploration investment and a lack of capital for small to medium-sized mining companies have contributed to the significant reduction in investment levels in Western Australian mining and resources projects.

The only industry within this sector currently experiencing high levels of investment is the oil and gas sector, where exploration and development have continued.

Mr Brown believes that, to some degree, this has helped offset the fluctuations of work available within other areas. But he concedes the projects that are proceeding are large-scale projects – such as the LNG expansion at the Burrup Peninsula – that tend to benefit one or two large consultancies, but do not provide a broad spread of work across the industry.

Association of Consulting Engineers Australia (ACEA) WA Division chairman Paul Reed believes that the Federal and State governments should investigate ways to support local industry activity, especially during a period where the global economy is slowing down and businesses are starting to feel the effects of this locally.

According to Mr Reed, one of the principal costs for an organisation in the consulting engineering industry is personnel. When work runs out or becomes scarce, the easiest way to address cost issues is to reduce the number of personnel, he said.

But Mr Reed believes this exposes the industry to the risk of losing experienced staff to other industries, or to the engineering industry overseas. There has been increasing evidence of the latter recently, and Mr Reed believes this trend poses a real threat both to the industry and the profession.

“As far as the ACEA is concerned there is a very strong case to support local industry in times when work is scare, and we are certainly looking to getting a positive response from the Government in order to address that situation,” he said.

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