Mining slowdown hits engineering sector

THE major engineering companies in Western Australia cut employment by 15 per cent during the past 12 months, defining the impact of the global financial crisis on the sector.

The 25 largest engineering firms in WA currently employ a total of 6,669 engineers, according to research for WA Business News Book of Lists.

That's down from a record 7,883 a year ago, a fall of more than 1,200.

Australia's largest engineering company, Sydney-based WorleyParsons, and Perth company GRD Minproc accounted for a large part of the reduction. Other firms to cut engineering employment in WA included international firms Hatch Associates and SNC-Lavalin, national companies GHD and John Holland and local firms Calibre Global and Lycopodium.

Consulting engineers were among the first professions hit by last year's global financial crisis, which prompted many companies to halt or slow work on expansion projects.

As well as cutting employment levels, many engineering firms responded by cutting remuneration levels.

However, this reflects the low point for the sector, which is likely to start increasing employment.

Only a handful of firms experienced increased engineering employment, with the growth mostly tied to the fast-growing oil and gas sector.

Expanding engineering firms included Technip Oceania, Wood Group subsidiary JP Kenny and Norway's Aker Solutions.

Worley acknowledged in its 2009 annual report that its minerals and metals business in Australia had experienced a challenging year, though most other aspects of its business, including oil and gas, had performed well.

It also forecast reduced earnings from minerals and metals in the current financial year.

As a result, the number of engineers in its WA offices was cut from 2,000 to 1,600.

In percentage terms, GRD Minproc experienced an even larger reduction in engineering employment, from 550 to 250.

In its latest half-year report, Minproc reported a 21 per cent fall in revenue "as a result of the sustained global downturn in mining investment".

The group said it managed to maintain its operating margins as a result of cost reductions.

Minproc has been looking to increase its presence in the iron ore sector in Australia and South America to offset weak activity in other commodity markets.

The directors of Minproc's parent company GRD Ltd recently recommended that shareholders accept a takeover offer from UK engineering company AMEC, which has had a modest presence in Australia, employing 170 engineers in Perth.


(existing subscribers)

The password field is case sensitive.
Request new password

Add your comment

BNIQ sponsored byDiversus

Share Price

Closing price for the last 90 trading days
Source: Morningstar

Total Shareholder Return as at 29/06/18

1 year TSR5 year TSR
722 WA (and selected non WA) listed companies ranked by 1 year TSR relative to other companies with similar revenue
Source: Morningstar


77 listed non wa companies ranked by revenue.
Source: Morningstar

BNiQ Disclaimer