Labour market stranglehold

A report released by the Minerals Council of Australia (MCA) projects the mining sector will need to employ 86,000 more workers, from 128,000 in 2008 to 215,000 in 2020, an increase of 68%.

A report released by the Minerals Council of Australia (MCA) projects the mining sector will need to employ 86,000 more workers, from 128,000 in 2008 to 215,000 in 2020, an increase of 68%.

The report, prepared for the MCA by Simon Molloy and Dr Yan Tan, projects the demand for labour in the minerals sector for nine major commodities in Australia from 2008 to 2020.

The labour demand projections are based on mineral output projections for the major commodities to 2020, supplied by Access Economics.

The report also projects levels of employment for the major occupational categories to 2020, enabling a comparison of the increase in projected demand for labour by occupation with the total size of employment in the corresponding occupational categories Australia-wide in 2020.

The report projects the total number of people employed Australia-wide in nine level 1 Australian Standard Occupational Categories (ASCO) by 2020.

Of these nine categories, six groups represent the overwhelming majority of employees at Australian mines.

These groups include managers and administrators, professionals, associate professionals, tradespersons and related workers, intermediate production and transport workers, labourers and related workers.

According to the report, the economy-wide projections of these major occupational categories present the following characteristics:

The total number of persons in Australia in these six ACSO occupational categories is expected to grow by around one million persons in the 12 years to 2020 or by 15%;

The two fastest growing occupational categories in Australia, by a significant margin, are ‘managers and administrators’ and ‘associate professionals’, which are projected to grow at 36% and 28% respectively. This contrasts markedly with the national figures for the groups ‘tradespersons and related workers’, ‘intermediate production and transport workers’ and ‘labourers and related workers’, which are projected to grow at 2%, 5% and 4% respectively. According to the report, these varying relative growth rates across occupations reflect the general growth trends of the economy and its changing industry structure, for example, the relative growth of services compared with manufacturing.

Output demand

The report indicated a significantly increased demand for labour in the mining sector leading up to 2020.

To achieve currently predicted increases in output and assuming no significant changes in labour productivity, the mining sector will need to employ 86,000 more workers, from 128,000 in 2008 to 215,000 in 2020, an increase of 68%.

The largest state increase, by a significant margin, will be in WA, with a projected increase of 47,700 persons or 85% growth in demand for labour. This represents a 55% share of the total national increase in demand.

By mineral commodity, the largest increases are projected to be in iron ore (20,814 persons or 106%) and coal (18,896 or 53%).

The greatest increase in the demand for labour in absolute terms by occupational category is projected to be in the ‘tradespersons’ and ‘semi-skilled workers’ categories, with these together accounting for an increase of 61,386 or 71% of the overall increase. According to the report, it is clear from the combined demand and employment projections that the occupational categories for which demand from the mineral sector is expected to grow most rapidly are those for which total economy-wide employment is projected to grow most slowly — ‘tradespersons and related workers’ and ‘intermediate production and transport workers’.

In terms of the mining industry’s capacity to attract sufficient labour there are two ways to interpret this projected outcome, according to the report.

The negative interpretation is that the pool of potential employees in these occupational categories will grow only slowly and will shrink relative to total employment and that this will make it more difficult for the mineral sector to attract the labour it needs.

Before settling on this interpretation, however, it is necessary to consider why the numbers in these categories are likely to be in relative decline.

One of the main reasons is likely to be that the demand for workers in these occupational categories is declining economy-wide.

Therefore, on a more positive interpretation, the fall in demand for these occupational categories from sectors such as manufacturing represents an opportunity for the mining industry to attract workers from these other sectors.

In addition, it must be emphasised that the total number of new workers required by the minerals sector is still relatively small compared to the total number of workers nation-wide in these occupational categories.

This interpretation implies that there is likely to be sufficient capacity in the labour market in the two key occupational categories to meet the industry labour demand.

Click here to view the full report.

Key contact:

Minerals Council of Australia

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