A business lobby group in Australia is urging the Federal Government to boost the country's immigration levels by up to 15% to meet current and future skill shortages.

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Skill shortages are of concern in occupations requiring science, technology, engineering and mathematics (STEM) skills​

The Australian Industry Group believes that immigration needs to be increased from 190,000 this financial year to 220,000 in 2014/2015, with a particular focus on skilled migrants.

It believes that skills such as science, maths and engineering are much needed as Australia is not currently producing enough trained and skilled people in these sectors.

In a submission to the Federal government on the size of the immigration programme to be set in the May Budget, Ai Group chief executive, Innes Willox said there are proven benefits to the economy of a strong migration programme.

'An increase in migrant numbers supports positive growth in our population and especially in our adult workforce, which is important due to relatively low rates of natural population growth,' he said.

'A higher skilled migration intake is appropriate at present due to Australia's historically low, albeit growing, unemployment rates and the deepening impact of our ageing workforce with 9% of all Australian employees now aged 60 or over and 17% aged 55 or over,' he explained.

He also pointed out that there are persistent skill shortages in key growth industries including mining services, engineering, infrastructure and health services.

'With early indicators suggesting a positive upturn in national housing market activity, we expect the residential and commercial construction cycles will pick up significantly from 2014/2015 which will in turn lead to further skilled trade shortages. This will be exacerbated by the flow of construction workers into the mining sector and reduced trades apprenticeship numbers in recent years,' said Willox.

'In particular, the flow of skilled workers into the mining industry from construction and industrial sectors will continue as mining moves from its current investment and expansion phase into a very strong period of growth in output and exports,' he added.

These skills shortages and labour hire difficulties were seen clearly in recent Ai Group construction sector surveys. During the six months to September 2013, some 67.7% of respondents reported either major or moderate difficulty in the recruitment of skilled labour, up from 65.7% six months ago. The sourcing of sub-contractors was also a dominant supply constraint with 47.1% citing major or moderate difficulty, up from 43.8%.

The skill shortages situation is even more serious in relation to occupations requiring science, technology, engineering and mathematics (STEM) skills. The occupations where there are shortages due to low STEM levels, as illustrated by a recent Ai Group report include technicians and trade workers and managers.

'This is deeply concerning considering the Office of the Chief Scientist recently reported that 75% of the fastest growing occupations require STEM skills and knowledge,' said Willox.

'While up skilling our current workforce remains a priority, a larger skilled migration programme will be necessary to manage the current situation and to assist in smoothing the path to future growth across the economy,' he concluded.