Skill Shortages in the Trades during Economic Downturns. Occasional Paper

During the recent economic downturn, media and industry reports of skill shortages in the trades continued to appear. The intent of this paper is to examine the evidence for skill shortages in the trades persisting during the economic downturns over the last 20 years, using various indicators. These include employment growth, vacancy rates, unemployment rates, apprentice completions and occupational mobility. This paper contains the following key messages: (1) There is no evidence of persistent skill shortages during downturns in the construction, automotive and engineering trades, and unconvincing evidence of persistent shortages in the electrotechnology and telecommunications trades, the food trades and hairdressing; (2) Declining numbers of apprenticeship completions account for much of the persistent shortage in the electrotechnology and telecommunications trades during the 1990s and 2000s, but apprenticeship completions (expressed as a proportion of employment) for this trade have now recovered to pre-1992 levels. If recent completion numbers are maintained, it should be possible to avoid future skill shortages; and (3) Very high job churn creates the perception of persistent skill shortages in the food trades and in hairdressing. Many food tradespersons and hairdressers swap employers but remain in their occupation. Two appendices are included. (Contains 22 tables, 21 figures and 4 footnotes.)