Renewed optimism in commercial construction and government infrastructure is expected to increase the demand for engineers in Australia.

The oversupply of engineers in Australia has grown from a surplus of 3,700 people in the December 2013 quarter to 4,100 in the March 2014 quarter, according to the new Clarius Skills Indicator report.

However, the Indicator shows engineering recruitment specialist SouthTech recorded more demand for permanent roles in the first four months of 2014 than in the past two years.

Paul Barbaro, Executive General Manager of SouthTech, a division of the Clarius Group said business is pre-empting growth by securing talent now to avoid future skills shortages.

He explains the demand for engineers is impacted because of the weakening investment phase of the mining boom, with the construction sector yet to fill the gap. Generally Australia would have about 300 – 400 major construction projects on the table at any one time. In the past 12 months there’s been an average decrease of 45 per cent of projects.

But renewed optimism and strength in infrastructure and commercial construction is starting to flow through to skills demands and this should kick in further late 2014 and early 2015.

The report cited Government investment in infrastructure and the housing sector as significant growth drivers for the economy, stepping in from where the mining boom has left off. A weaker dollar will also provide impetus for business to invest in new facilities.

The construction sector has begun to bounce back with the Bureau of Statistics reporting the number of dwelling units approved increased by 20 per cent from March 2013 to March 2014. Dwelling units approved in January were almost at record high numbers.

According to Mr Barbaro, as the lower dollar takes the pressure off agriculture, manufacturing and education, businesses will increase investment in commercial buildings such as factories, education facilities and storage and processing facilities, driving demand for engineers.

He added that business, particularly larger companies with big contracts, had an increased appetite for permanent staff, rather than short term contractors, which can be considered as a major shift from previous years.