2022 was another year defined by volatility, with labour shortages, supply chain issues and rising costs impacting almost every industry. Despite these challenges the engineering sector experienced strong growth driven by public sector spending, investment in innovation as well as an increasing pipeline of Environmental and Social Governance (ESG) focussed projects. In 2023 the engineering market is worth $48 billion dollars in Australia and almost $7 billion dollars in New Zealand, with both markets growing year on year between 2018-2023 – a trajectory that’s expected to continue. However, there are still uncertainties, with factors such as high inflation, rising interest rates and critical talent shortages that will shape the sector.
Engineering is a broad, multi disciplined industry with many facets typically relating to the design, development and build of structures, products, and processes. At the core of any engineering discipline is innovation and problem solving, both of which will be critical to meet clean energy targets, buoy economies through infrastructure investment and create higher functioning systems and processes.
The key factors currently at play in the engineering sector
Talent shortages – the sector remains short of skilled engineers with a tight labour market, high turnover, fewer graduates, and difficulties attracting overseas talent post COVID presenting a significant challenge. These conditions run concurrently with growing demand from increased infrastructure spending and clean energy commitments. The sector is extremely competitive, with the Australian Financial Review reporting that engineering salaries are beating inflation as business’s resort to ad hoc pay increases and share based retention plans to retain staff.
Innovation – one of the key impacts of the pandemic has been uncovering vulnerable supply chains and businesses have had to seek new, innovative solutions, products, and processes to mitigate future disruptions. Engineers are increasingly creating solutions founded in IOT, Robotics and AI to provide greener, more connected solutions across multiple industries including manufacturing, mining, and construction.
ESG/Sustainability – the global demand for engineering and other skills required to enable the transition to net zero is expected to intensify in the coming years as the world demands faster action to decarbonise economies. Specialists like Decarbonisation Experts, Materials Scientists and Environmental Engineers (roles critical to helping nations meet net zero emissions targets) are expected to be highly sought after.
What does the future look like for engineering?
According to Engineers Australia’s Advisor to the Chief Engineer, Peter Briggs, the future for Engineering is a multidisciplinary approach as the scale, scope and call for clean energy transition create projects on a scale too great to be confined to one discipline. In the coming years engineers will play significant roles in national megaprojects that deliver better infrastructure, cleaner manufacturing and mineral exploration – and clean energy. For engineering consultancies there will be a significant pipeline of work and long-term opportunities to pursue.
How invoice finance can support growth and innovation in Engineering
The engineering industry in Australia and New Zealand is labour intensive, meaning businesses are heavily reliant on specialised talent (compared to other costs and overheads). Engineering contractor businesses working on large scale projects can be at high risk of experiencing cash flow stress – making them a natural fit for invoice finance.
Your money faster
Invoice finance is a great solution for businesses looking to maintain cash flow certainty. An invoice finance facility helps businesses close the gap between when they invoice their customers and when they receive payment.
An invoice finance facility can deliver:
- Better cash flow – with funds available on approval, get your money back into the business faster.
- More flexibility – choose which invoices you would like funded, when and at what percentage (up to 95%).
- Supported business growth – enjoy stability and peace of mind when taking on a new contract that existing and new obligations can be met.
- Better time/value of money – faster payments mean working capital is re-invested sooner, creating stability, less need for additional debt and larger returns.
With the ability to choose which invoices to fund, when and at what percentage, an Apricity Invoice Finance facility gives businesses flexibility and control to fund growth.
The engineering industry in Australia and New Zealand is forecast to grow over the next 5 years (and beyond) with engineering roles in high demand. If current talent shortages, the impact of global high inflation and ongoing supply chain issues are managed effectively, engineers may find themselves at the forefront of the next revolution, designing solutions that have the power to effect real change.
Learn more how an Apricity Invoice Finance facility can help power your business growth.