Strengthening support for apprenticeships – issues and opportunities

Strategic context

Looking beyond the current cyclical contraction, the construction and infrastructure sector is expected to continue to experience high demand for skilled workers. The construction industry is New Zealand’s fifth largest industry, producing just over 6% of national gross domestic product. However, sector growth has slowed since mid-2022 amid cost pressure and economic challenges. Industry analysis also suggests that there is around a 50% shortfall in workforce required to deliver on the projected building and civil infrastructure pipeline.

The number of learners enrolling in apprenticeships has consistently climbed over the last 10 years, reaching a significant peak in 2022 and more than doubling between 2014 and 2023. However, the volume entering the apprenticeship system is not enough to meet demand nor has the apprenticeship system been as responsive to changing industry needs, and the boom-and-bust cycle of the sector generally. Also of concern is the quality of apprentices, and the proportion of enrolled apprentices that go on to complete their apprenticeship and transition into employment. Completion rates for construction and infrastructure apprentices in New Zealand range between 39% and 58%, which is low compared to international comparators. In Germany, Ireland, Scotland, and the Netherlands, completion rates range between 65% and 75%. In New Zealand, there are also wide variations in completion rates by gender and by ethnicity.

In light of these challenges, this analysis has been commissioned to constructively contribute to policy formulation aimed at improving labour market outcomes for the sector. Our analysis focuses primarily on government-funded apprenticeship support programmes as a key intervention to ensure workforce quantity and quality. While our recommendations are primarily directed at the government, we acknowledge that industry, employers, and the tertiary sector all play crucial roles and must work in partnership with the government to achieve the desired outcomes.