The number of students enrolled in government-funded vocational education in NSW has plummeted by 86,300 in the past year, new research from the National Centre for Vocational Education Research has revealed.

NCVER found that nationwide about 200,000 fewer people had participated in government-funded skills training in 2015, with the largest decline in students aged 15-19.

The dive in participation could entrench a national shortage of apprentices, as unions warn of a skills shortage in core trades that could drive up costs for businesses and home owners.