Industry group Engineering The Future, which has a membership of more than 450,000, makes the claim in its latest report. Other factors it cites for the skills shortage are misconceptions about the work of engineers and an impression that it is poorly paid.
The report, An Insight into Modern Manufacturing, says the Government should intervene to prevent the skills shortage constraining growth, claiming a failure to do so will harm the wider manufacturing sector in future.
It is built from insights and case studies on some of the counrty's biggest manufacturing companies, including Logicor Group and Coca-Cola Enterprises.
Engineering The Future has called for more "real world applications" when teaching the subject, adding that a culture of preparing engineering undergraduates simply to pass exams, without learning useful skills, is damaging the sector.
The group stresses that the Government should take action on the issue sooner rather than later, as many skilled engineers with over 30 years of experience will retire over the next five years.
It's the latest in a series of calls for businesses, schools and Government to work together to improve training for engineers.
Andrew Jones MP, apprenticeship ambassador in Parliament, emphasised the importance of engineering for the wider economy.
“Engineering is a key skill for our future prosperity,” he said. “That is why it is important that young people have all the facts at their fingertips so that they can make an informed decision about a career in engineering.”
Richard Green, chief executive of the Design & Technology Association, said the findings would come as "no surprise" to either Government or business.
"While it’s true that not enough young people are leaving school with the skills or motivation to pursue a career in engineering, the responsibility to more closely link the classroom with the workplace should not sit solely with the Government," he said.