GTO SCENariOS TO 2020

Transcription

1 D 10. The market for apprentices by region 1998 to The base case projections Regional apprentice markets: The risks to growth GTO industry scenarios: Constant market share The current allocation of GTO resources and the optimal 115 GTO expansion trajectory 13.1 The regional distribution of GTO activity versus the overall market Optimal GTO expansion trajectory 115 Looking Ahead 91

2 10. THE MARKET FOR APPRENTICES BY REGION 1998 TO 2020 This Part provides projections for employment of apprentices by Industry and Region. The analysis is intended to understand the future market opportunities for GTOs and identify regions with growth potential for GTOs and where there is no or little growth potential. The projections build on NIEIR standard scenarios for the period (detailed in Appendix 4). They use NIEIR s regional econometric models and the sum of the distributions from Figures A4.1 and A4.4 (Appendix 4). Results by industry and region are provided in Appendix 5. Regions used for this analysis correspond to regions in the ALGA/NIEIR State of the Regions reports and the NIEIR GTO quantitative survey. A list of regions and Local Government Areas (LGAs) included in those regions is provided at Appendix The base case projections The base case projections for resident employment, apprentice commencements, completions and in-training are given in Tables 10.1 to by region. Estimates for apprentices in training are determined by the propensity of each industry to support apprenticeships. Completion and drop-out rates reflect the average corresponding State expansion for the last five years. The level of commencements is the number of additional apprentices required in training total. Table 10.1 shows the base case for resident employment projections and the distribution of the change in employment over the forecast period. Table 10.2 uses an index where 1998 equals 100 to show the change in apprentice employment to total employment over the period. This highlights the shift toward some regions (for example resource regions) and away from others. Table 10.3 shows total projected apprentice commencements by region and Table 10.4 shows the total in-training over the forecast period. These tables reinforce the trend toward growth and decline in different regions over the period. Areas of decline are obviously going to be more challenging for GTOs based in those regions while areas of growth would appear to be regions of challenge and opportunity for GTOs. The bottom line figure is that the total apprentices in training for the base case are projected to increase from 189,000 in 2010 to 252,000 by Looking Ahead

3 D Table 10.1: Resident employment total employment Number Annual average change in employment between benchmark years Share of total number (per cent) ACT Adelaide Inner Adelaide North Adelaide South Melbourne Central Melbourne East Melbourne North Melbourne North East Melbourne Outer South East Melbourne South East Melbourne West NSW Central Coast NSW Central West NSW Far West NSW Hunter NSW Illawarra NSW Mid North Coast NSW North NSW Richmond Tweed NSW Riverina NSW Southern Tablelands NT Darwin NT Lingiari Perth Central Perth Outer North Perth Outer South QLD Cairns QLD Darling Downs QLD Fitzroy QLD Mackay QLD North QLD Resource region QLD Wide Bay Burnett continued next page Looking Ahead 93

4 Table 10.1: Resident employment total employment (continued) Number Annual average change in employment between benchmark years Share of total number (per cent) SA Mallee South East SA Mid North Riverland SA Spencer Gulf SEQ Brisbane City SEQ Brisbane South SEQ Gold Coast SEQ Moreton Bay SEQ Sunshine Coast SEQ West Moreton Sydney Central Sydney Eastern Beaches Sydney Northern Beaches Sydney Old West Sydney Outer North Sydney Outer South West Sydney Outer West Sydney Parramatta-Bankstown Sydney South TAS Hobart-South TAS North TAS North West VIC Ballarat VIC Bendigo VIC Geelong VIC Gippsland VIC Mallee Wimmera VIC North East VIC West WA Gascoyne Goldfields WA Peel South West WA Pilbara Kimberley WA Wheatbelt Great Southern Total Looking Ahead

5 D Table 10.2: Resident employment Ratio of total employment (apprentice weighted) to total employment ACT Adelaide Inner Adelaide North Adelaide South Melbourne Central Melbourne East Melbourne North Melbourne North East Melbourne Outer South East Melbourne South East Melbourne West NSW Central Coast NSW Central West NSW Far West NSW Hunter NSW Illawarra NSW Mid North Coast NSW North NSW Richmond Tweed NSW Riverina NSW Southern Tablelands NT Darwin NT Lingiari Perth Central Perth Outer North Perth Outer South QLD Cairns QLD Darling Downs QLD Fitzroy QLD Mackay QLD North QLD Resource region QLD Wide Bay Burnett continued next page Looking Ahead 95

6 Table 10.2: Resident employment Ratio of total employment (apprentice weighted) to total employment (continued) SA Mallee South East SA Mid North Riverland SA Spencer Gulf SEQ Brisbane City SEQ Brisbane South SEQ Gold Coast SEQ Moreton Bay SEQ Sunshine Coast SEQ West Moreton Sydney Central Sydney Eastern Beaches Sydney Northern Beaches Sydney Old West Sydney Outer North Sydney Outer South West Sydney Outer West Sydney Parramatta-Bankstown Sydney South TAS Hobart-South TAS North TAS North West VIC Ballarat VIC Bendigo VIC Geelong VIC Gippsland VIC Mallee Wimmera VIC North East VIC West WA Gascoyne Goldfields WA Peel South West WA Pilbara Kimberley WA Wheatbelt Great Southern Total Looking Ahead

7 D Table 10.3: Total apprentice commencements Number Per cent of total ACT Adelaide Inner Adelaide North Adelaide South Melbourne Central Melbourne East Melbourne North Melbourne North East Melbourne Outer South East Melbourne South East Melbourne West NSW Central Coast NSW Central West NSW Far West NSW Hunter NSW Illawarra NSW Mid North Coast NSW North NSW Richmond Tweed NSW Riverina NSW Southern Tablelands NT Darwin NT Lingiari Perth Central Perth Outer North Perth Outer South QLD Cairns QLD Darling Downs QLD Fitzroy QLD Mackay QLD North QLD Resource region QLD Wide Bay Burnett continued next page Looking Ahead 97

8 Table 10.3: Total apprentice commencements (continued) Number Per cent of total SA Mallee South East SA Mid North Riverland SA Spencer Gulf SEQ Brisbane City SEQ Brisbane South SEQ Gold Coast SEQ Moreton Bay SEQ Sunshine Coast SEQ West Moreton Sydney Central Sydney Eastern Beaches Sydney Northern Beaches Sydney Old West Sydney Outer North Sydney Outer South West Sydney Outer West Sydney Parramatta- Bankstown Sydney South TAS Hobart-South TAS North TAS North West VIC Ballarat VIC Bendigo VIC Geelong VIC Gippsland VIC Mallee Wimmera VIC North East VIC West WA Gascoyne Goldfields WA Peel South West WA Pilbara Kimberley WA Wheatbelt Great Southern Total Looking Ahead

9 D Table 10.4: Total apprentice in training Number Per cent of total ACT Adelaide Inner Adelaide North Adelaide South Melbourne Central Melbourne East Melbourne North Melbourne North East Melbourne Outer South East Melbourne South East Melbourne West NSW Central Coast NSW Central West NSW Far West NSW Hunter NSW Illawarra NSW Mid North Coast NSW North NSW Richmond Tweed NSW Riverina NSW Southern Tablelands NT Darwin NT Lingiari Perth Central Perth Outer North Perth Outer South QLD Cairns QLD Darling Downs QLD Fitzroy QLD Mackay QLD North QLD Resource region QLD Wide Bay Burnett continued next page Looking Ahead 99

10 Table 10.4: Total apprentice in training (continued) Number Per cent of total SA Mallee South East SA Mid North Riverland SA Spencer Gulf SEQ Brisbane City SEQ Brisbane South SEQ Gold Coast SEQ Moreton Bay SEQ Sunshine Coast SEQ West Moreton Sydney Central Sydney Eastern Beaches Sydney Northern Beaches Sydney Old West Sydney Outer North Sydney Outer South West Sydney Outer West Sydney Parramatta- Bankstown Sydney South TAS Hobart-South TAS North TAS North West VIC Ballarat VIC Bendigo VIC Geelong VIC Gippsland VIC Mallee Wimmera VIC North East VIC West WA Gascoyne Goldfields WA Peel South West WA Pilbara Kimberley WA Wheatbelt Great Southern Total Looking Ahead

11 D 11. REGIONAL APPRENTICE MARKETS: THE RISKS TO GROwTH Chapter 10 outlined the base case and indicated the risks that apply to the aggregation. This chapter and Appendix 6 analyse the risks to those forecasts. It gives the results for all regions quantified by the risk for the apprentice market. The statistic that is used for the risk analysis is the change in apprentices in training between 2010 and Figure 11.1(a) gives the result for Australia. It shows that there is a 50 per cent probability that the change in apprentices in training at the national level will be 60,582 and a 25 per cent probability that the change will be as low as 23,785. However, there is also a 25 per cent probability that the increase in the number of apprentices in training will be greater than 102,905. This shows the most probable outcome and the range of possibilities as well as the upper and lower extremes of those probabilities. As an example, the results are also shown for Melbourne South East (Figures 11.2(a) and 11.2(b)). Here there is a 50 per cent probability of a slight fall in apprentices in training between 2010 and There is a 25 per cent probability that the change in apprentices will be 542 or above. The Melbourne South East example is used to bring attention to Figure 11.1(b) by contrasting it with Figure 11.2(b). The high correlation coefficient of 0.79 indicates that the region is sensitive to macroeconomic risks, as would be expected. However, the high correlation coefficient of 0.66 indicates that the region is also sensitive to crowding out risks, as also would be expected. The latter is in contrast to the national coefficient for crowding out of only 0.04 (from Table 11.1(b)). This emphasises the variability in risks between regions and the shortcomings of aggregated national totals. By crowding out risks is meant the (negative) sensitivity of a region s apprentice demand to the expansion of apprenticeship demand in other regions. Thus, the expansion of apprenticeship demand in Western Australian regions to support mining expansion may destroy jobs and hence apprentice demand in South East Australian manufacturing regions. Looking Ahead 101

12 Figure 11.1(a): Australia: Cumulative probability for change in apprentices in training Figure 11.1(b): Australia: Macro growth versus crowding out total apprentices in training Regression Coefficients Macro expansion 0.99 Resource crowding out Coefficient Value 102 Looking Ahead

13 D Figure 11.2(a): Melbourne South East: Cumulative probability for change in apprentices in training Figure 11.2(b): Melbourne South East: Macro growth versus crowding out total apprentices in training Regression Coefficients Macro expansion Resource crowding out Coefficient Value Looking Ahead 103

14 12. GTO INDUSTRY SCENARIOS: CONSTANT MARKET SHARE This chapter shows forecasts for the GTO industry in terms of total apprentices in training on the assumption that the market share of GTOs for each of the 65 regions, in terms of the apprentice in-training market, is held constant at estimated 2010 levels to The data is aggregated into States and Territories. Results at the national level are shown in Figure 12.9(a). The main sources of risk are also shown (macro risk or resource crowding out). The national mean expectation is that the GTO market will grow by 7,138 between 2010 and There is a 25 per cent probability that it will be below a growth of 2,894. Also, there is a 25 per cent probability the change will be above 11,360. Figure 12.10(a) shows the probability distribution for the growth in GTO total additional field staff for It shows that the number of field staff will probably need to grow by between 230 and 240 to deal with the mean expected growth in GTO apprentices in training. 104 Looking Ahead

15 D Figure 12.1(a): New South Wales: Cumulative probability change in GTO apprentices in training (number) Figure 12.1(b): New South Wales: Macro growth versus crowding out change in GTO apprentices in training Regression Coefficients Macro expansion 0.98 Resource crowding out Coefficient Value Looking Ahead 105

16 Figure 12.2(a): Victoria: Cumulative probability change in GTO apprentices in training (number) Figure 12.2(b): Victoria: Macro growth versus crowding out change in GTO apprentices in training Regression Coefficients Macro expansion 0.91 Resource crowding out Coefficient Value Looking Ahead

17 D Figure 12.3(a): Queensland: Cumulative probability change in GTO apprentices in training (number) Figure 12.3(b): Queensland: Macro growth versus crowding out change in GTO apprentices in training Regression Coefficients Macro expansion 0.91 Resource crowding out Coefficient Value Looking Ahead 107

18 Figure 12.4(a): South Australia: Cumulative probability change in GTO apprentices in training (number) Figure 12.4(b): South Australia: Macro growth versus crowding out change in GTO apprentices in training Regression Coefficients Macro expansion 0.87 Resource crowding out Coefficient Value Looking Ahead

19 D Figure 12.5(a): Wwestern Australia: Cumulative probability change in GTO apprentices in training (number) Figure 12.5(b): Western Australia: Macro growth versus crowding out change in GTO apprentices in training Regression Coefficients Macro expansion 0.87 Resource crowding out Coefficient Value Looking Ahead 109

20 Figure 12.6(a): Tasmania: Cumulative probability change in GTO apprentices in training (number) Figure 12.6(b): Tasmania: Macro growth versus crowding out change in GTO apprentices in training Regression Coefficients Macro expansion 0.94 Resource crowding out Coefficient Value Looking Ahead

21 D Figure 12.7(a): Northern Territory: Cumulative probability change in GTO apprentices in training (number) Figure 12.7(b): Northern Territory: Macro growth versus crowding out change in GTO apprentices in training Regression Coefficients Macro expansion 0.92 Resource crowding out Coefficient Value Looking Ahead 111

22 Figure 12.8(a): Australian Capital Territory: Cumulative probability change in GTO apprentices in training (number) Figure 12.8(b): Australian Capital Territory: Macro growth versus crowding out change in GTO apprentices in training Regression Coefficients Macro expansion 0.98 Resource crowding out Coefficient Value 112 Looking Ahead

23 D Figure 12.9(a): Australia: Cumulative probability change in GTO apprentices in training (number) Figure 12.9(b): Australia: Macro growth versus crowding out change in GTO apprentices in training Regression Coefficients Macro expansion 0.98 Resource crowding out Coefficient Value Looking Ahead 113

24 Figure 12.10(a): Australia: Cumulative probability for GTO total additional field staff to 2020 Figure 12.10(b): Australia: Macro growth versus crowding out GTO total additional field staff to 2020 Regression Coefficients Macro expansion 0.98 Resource crowding out Coefficient Value 114 Looking Ahead

25 D 13. THE CURRENT ALLOCATION OF GTO RESOURCES AND THE OPTIMAL GTO EXPANSION TRAJECTORY A theme of this Part has been the variability between regions and the need for GTOs to understand that variability in order to optimise their markets and resource allocation. This chapter builds on that analysis. The previous chapter examined the case where current regional GTO market share was held constant at current levels over the period. This chapter examines the case of determining the optimum expansion trajectory by taking into account the factors where GTOs appear to possess a competitive advantage The regional distribution of GTO activity versus the overall market Initially the current distribution of GTO resources will be compared to the distribution of the market for apprentices. The first column of Table 13.1 shows the distribution of apprentices (that is, excluding other) in training across the regions. Thus, 1.6 per cent of total apprentices in training, given the national total, are in the ACT for 2009, while 2.7 per cent were located in Adelaide Inner, and so on. The second column gives the allocation of GTO apprentices in training from the NIEIR GTO survey. As the survey only listed the metropolitan regions as a whole, by necessity, the survey totals had to be prorated across the metropolitan area sub-regions on the basis of NIEIR s estimates of total apprentices in training. The third column gives the difference between the second and first columns. A negative difference indicates that the GTO s share of apprentices in a region is less than the region s share of total apprentices. A positive difference indicates the reverse, that is, the region s share of GTO apprentices is greater than the region s share of total apprentices. A positive difference for a region indicates that the region s GTOs have an above average share (compared to the share of GTOs across all regions) of the local apprentices in training market. It is a prima facie indicator that the local GTO or GTOs is/are producing above average performance(s). The standout regions in terms of the performance of the GTOs are Adelaide, NSW Central West, Northern Territory, Queensland non-metropolitan regions and Victoria s more remote nonmetropolitan regions Optimal GTO expansion trajectory Earlier chapters of the study have documented that the performance of GTOs improves, at least in terms of productivity and completion rates, when: (i) the slower the growth in apprentices; (ii) the lower the apprentices in training relative to the not in employment catchment; and (iii) the higher the not in employment rate to a given threshold. Using the quantitative rules established earlier, together with an inputted GTO market share and productivity, it is possible to scan for the optimum expansion trajectory across the regions. Optimum in the sense of maximising productivity based on a notional allocation of a fixed number of additional field staff. The results of this optimisation exercise are given in Table The third column of the table gives the market expansion factor. This represents the total change in apprentices in training by region from Chapter 10, plus the unexploited market potential from Table From Table 13.1, if this sum is negative then the entry in the table is zero. In other words there is no or limited potential for expansion within this market. Looking Ahead 115

26 The proportional expansion in column one of Table 13.2 is based on a uniform allocation of 500 field staff across the regions on the basis of the oscillation derived from column three. Given that this results in a total of 14,631 apprentices in training, then the productivity is 29.2 (per FTE). Column two optimises the allocation of the 500 additional field staff to improve productivity. This results in 15,750 apprentices in training, or a productivity of Those regions which obtain above average (compared to the change in the apprentice market) distribution of labour resources are designated with the description favour in Table From Table 13.2, the region not in favour consists of the slow growing/declining non-metropolitan regions and the heavily concentrated, in terms of apprentices, metropolitan regions. The main message from the results, however, is that the shift from a proportional growth strategy to an optimum growth strategy does not require a major change of emphasis. For the Corporate Business Model it would require paying attention to the prospects in the metropolitan suburban regions and the moderate growing non-metropolitan regions. In terms of targets, for the case of the allocation of 500 additional field staff, it would require targeting a marginal market share of approximately 15 per cent in the favoured regions and 8 to 10 per cent for the other regions where apprentice growth is positive. 116 Looking Ahead

27 D Table 13.1: Distribution of in-training total apprentices versus GTO (from survey) Total apprentices GTO (survey) GTO less total market ACT Adelaide Inner Adelaide North Adelaide South Melbourne Central Melbourne East Melbourne North Melbourne North East Melbourne Outer South East Melbourne South East Melbourne West NSW Central Coast NSW Central West NSW Far West NSW Hunter NSW Illawarra NSW Mid North Coast NSW North NSW Richmond Tweed NSW Riverina NSW Southern Tablelands NT Darwin NT Lingiari Perth Central Perth Outer North Perth Outer South QLD Cairns QLD Darling Downs QLD Fitzroy QLD Mackay QLD North QLD Resource region QLD Wide Bay Burnett SA Mallee South East SA Mid North Riverland SA Spencer Gulf SEQ Brisbane City SEQ Brisbane South SEQ Gold Coast continued next page Looking Ahead 117

28 Table 13.1: Distribution of in training total apprentices versus GTO (from survey) (continued) Total apprentices GTO (survey) GTO less total market SEQ Moreton Bay SEQ Sunshine Coast SEQ West Moreton Sydney Central Sydney Eastern Beaches Sydney Northern Beaches Sydney Old West Sydney Outer North Sydney Outer South West Sydney Outer West Sydney Parramatta-Bankstown Sydney South TAS Hobart-South TAS North TAS North West VIC Ballarat VIC Bendigo VIC Geelong VIC Gippsland VIC Mallee Wimmera VIC North East VIC West WA Gascoyne Goldfields WA Peel South West WA Pilbara Kimberley WA Wheatbelt Great Southern Total Looking Ahead

29 D Table 13.2: GTO market for apprentices for 500 field personnel Proportional expansion GTO Optimal expansion Market expansion Market share ACT Adelaide Inner Market status Adelaide North favour Adelaide South favour Melbourne Central Melbourne East favour Melbourne North favour Melbourne North East favour Melbourne Outer South East favour Melbourne South East favour Melbourne West favour NSW Central Coast favour NSW Central West NSW Far West NSW Hunter NSW Illawarra favour NSW Mid North Coast favour NSW North NSW Richmond Tweed favour NSW Riverina NSW Southern Tablelands favour NT Darwin NT Lingiari Perth Central Perth Outer North favour Perth Outer South favour QLD Cairns favour QLD Darling Downs favour QLD Fitzroy QLD Mackay QLD North favour QLD Resource region favour QLD Wide Bay Burnett favour SA Mallee South East SA Mid North Riverland SA Spencer Gulf SEQ Brisbane City continued next page Looking Ahead 119

30 Table 13.2: GTO market for apprentices for 500 field personnel (continued) Proportional expansion GTO Optimal expansion Market expansion Market share Market status SEQ Brisbane South favour SEQ Gold Coast SEQ Moreton Bay SEQ Sunshine Coast favour SEQ West Moreton favour Sydney Central Sydney Eastern Beaches favour Sydney Northern Beaches favour Sydney Old West favour Sydney Outer North favour Sydney Outer South West favour Sydney Outer West favour Sydney Parramatta- Bankstown favour Sydney South favour TAS Hobart-South favour TAS North TAS North West favour VIC Ballarat favour VIC Bendigo favour VIC Geelong VIC Gippsland VIC Mallee Wimmera VIC North East favour VIC West WA Gascoyne Goldfields WA Peel South West WA Pilbara Kimberley WA Wheatbelt Great Southern favour Total favour 120 Looking Ahead