The supply and demand of engineering graduates

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Today we published the first of a series of smart skills investment papers, taking a deep dive into different education and skills issues. In our paper, we look at the funding for engineering degrees in the higher education sector, in particular:

  • the demand and supply of engineering graduates within UK universities;
  • an overview of how universities are funded;
  • how much is costs to deliver an engineering course;
  • what impact funding changes have had on the demand and delivery of engineering; and
  • what future funding challenges universities’ are facing as a result of these changes.

We also make four recommendations to Government, which will help to alleviate the funding challenges we identified. In the first of four blogs, we take you through our findings, challenges and recommendations...

So what did our paper find?

  1. Do manufacturers demand engineering graduates?
  2. Are there enough students wanting to study engineering?
  3. Are there places at universities to meet this demand?

In short, yes, yes and no.

Manufacturers demand engineering graduates, and recruit them to fill high-skilled roles in their companies. Two-thirds (63%) reported that they had recruited an engineering graduate in the past three years, and a further 66% of them planned on doing so in the following three years . This is why the manufacturing industry recruits the largest proportion of all engineering graduates (26%) – with the majority going on to work as manufacturing engineers (40%) or mechanical engineers (38%).


There is also appetite from students wanting to study engineering at university. In the last five years, applications for engineering courses had increased annually by 5% compared to just 3% for all other subjects. There were also increases within specific sub-disciplines of engineering, in particular in General Engineering and Mechanical Engineering. However, over the same period, acceptances onto engineering courses have only increased annually by 3.3%, and the number of engineering graduates has remained stuck at 15%.

This gap widens further when we look at the number of those graduates that then go on to work in an engineering occupation within an engineering company.


As application numbers grow, manufacturers want to see that the number of students accepted onto these courses, who then go on to graduate, increases in line with this demand. Only then can we meet the shortfall of 20,000 qualified engineers estimated by Engineering UK.

Whilst there are many reasons driving this, a critical factor in ensuring that universities can meet the demand from students to study engineering will be sufficient funding to supply enough places. If the Government can successfully do this, the gap between applications and acceptances should close as universities can offer more places – however as our next blog explains, the way in which universities are currently funded is a barrier to overcoming this.

Read the full report here, and tweet us your views @EEF_Economists


Education and Skills Policy Advisor

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