New Zealand is set to be short 40,000 manufacturing and engineering workers by 2028 if immediate action is not taken, according to a new government study.
The research found the sector's critical skills shortage will grow 38 percent in six years.
"Widespread disruption caused by COVID-19, immigration policy settings as well as constraints on supply chains and the international labour market will see the industry skills gap continue to widen - if left unchecked," the report, commissioned by Hanga-Aro-Rau, the Manufacturing, Engineering and Logistics Workforce Development Council, said.
NZ Manufacturers and Exporters Association CEO Dieter Adam said the shortage of workers at all skill levels is impacting export relationships built up over decades.
"When you've had good relations with customers for 20 years and you have to tell them you can't fill any orders until the end of next year and you are losing customers as a result, this is a serious blow to a business of this size," Adam said.
"These customers have a policy of never relying on one supplier and as a result, New Zealand is losing contracts to our international competition."
Hanga-Aro-Rau chief executive Phil Alexander-Crawford said the pandemic had demonstrated the need for the industry to reduce its long-term reliance on migrant labour to remain sustainable.
"Historically around a quarter of skilled labour needs in manufacturing and engineering are met by migrants," Alexander-Crawford said.
"By 2028 we will need 463,000 workers in key regions around the country, however, based on current trends, a skills shortfall of over 40,000 is set to constrain future manufacturing output."
The researchers found increasing the number of Māori, Pacific, female and disabled workers in the manufacturing and engineering industry will be essential to filling the skills gap.
The report said the pandemic has exacerbated inequities for Māori and Pacific peoples with their participation within the national manufacturing and engineering workforce up to 25 percent lower than prior to COVID-19.
Alexander-Crawford said more needs to be done to better support Māori and Pacific people in to a higher level of vocational training.
"We know that Māori and Pacific workers will pass knowledge down through to the younger generations within the workplace," he said. "They are also an essential referrer to the industry, and it is common to see extended whānau working within the same firm for decades."
"When this link is broken and an individual leaves the industry, the impact on the sector can be far more widespread reducing the pool of potential workers from future generations."
The report highlights the need for new targeted culturally relevant training programmes.
"The sector is also going to need to look at how it can incorporate more flexibility into what are usually rigidly defined operating times for shifts - in order to attract more female and younger workers," Adam said.
Alexander-Crawford said the skills shortage could also be partially offset through investment in technology and improvements in labour productivity.
The report will be presented at a summit later this month between Government, employers, industry stakeholders and vocational education participants.
