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After accounting for seasonal influences, the report found contractors' average weekly billings had risen, reflecting clients' preferences for flexible workforces amongst the current economic uncertainty. It warned, however, that the pace of growth was only modest and was well below that seen at the start of 2001.
According to REC, the higher rates reflect a marginal strengthening of demand for contractors as well as a slight rise in skills shortages.
Margins for contractors fell for the ninth month running in January, with the sharpest rate of decline in the report's four-and-half year history. 19 per cent of consultancies reported margins had declined during the month, largely as a result of strong competition and rising wage rates.
Demand for IT contractors was at 35.5 per cent, ranking seventh out of eight sectors. This time last year it was in third place at 54.6 per cent.
The rate of decline in demand for IT contractors was at its weakest level for three months.
No IT contract skills were reported as being in demand.
On the permanent side, the REC Report recorded a fall in the number of staff placements across all sectors for the ninth consecutive month in January. The rate of decline eased for the third month running to record the weakest fall since last May. In general, softer demand for staff was attributed to the economic slowdown and weak business confidence amongst employers.
Availability of permanent staff showed the weakest rise for three months. Recruitment agencies reported an increase in the availability of staff for the eighth month running in January, but the rise was less marked than that seen in the previous two months.
Permanent salaries rose for the first time in four months.
Demand for permanent IT staff was at 35.6 per cent in January, ranking eighth, with the sharpest recorded rate of decline in all eight sectors. This time last year it was at 59.7 per cent and ranked fifth.
Key permanent IT skills reported in short supply were: Software Engineers and Programmers.
According to Jobstats, the average hourly rate for IT contractors is £22 per hour and the average annual rate quoted is £37,200 per annum.
The top five skills are:
Is this the beginning of growth in 2002? |
Support - 21 per cent of jobs - Average rates: £18 per hour/ £33,200 per annum
Management - 17.6 per cent of jobs - Average rates: £28 per hour/ £42,400 per annum
Design - 15.6 per cent of jobs - Average rates: £32 per hour/ £39,700 per annum
Unix - 15.0 per cent of jobs - Average rates: £37 per hour/ £39,100 per annum
Finance - 13.9 per cent of jobs - Average rates: £35 per hour/ £44,500 per annum
(Note: Hourly rates refer to contract positions, annual rates to permanent)
The top five locations are:
London - 22.6 per cent of jobs - Average rates: £29 per hour/ £44,900 per annum
City - 6.4 per cent of jobs - Average rates: £27 per hour/ £47,400 per annum
Berkshire - 4.6 per cent of jobs - Average rates: £20 per hour/ £40,300 per annum
Surrey - 4.1 per of jobs - Average rates: £22 per hour/ £37,900 per annum
Germany - 3.6 per cent of jobs - Average rates: £48 per hour/ £53,600 per annum
According to TheSkillsMarket, the five highest earning skills by contract rate are:
| Rank | Skill | Rate | | 1 | SAP R/3 HR | £75.00 | | 2 | GPRS | £64.00 | | 3 | SAP Development | £63.00 | | 4 | J2EE | £62.67 | | 5 | BEA WebLogic Server | £62.50 |
Brett Walsh, Head of UK Human Capital at Andersen, said: "In January there were signs of increasing pay pressure, together with a slowing in the decline in demand for staff, and a steadying in the rate of job losses. These all signal the possibility of a turning point to come, towards growth in employment as business confidence picks up from the lows of late last year. A potential strengthening of the labour market is particularly welcome as it not only suggests the re-emergence of business expansion plans but should also help to support the maintenance of consumer confidence."
Tim Nicholson, Chief Executive of REC, said: "Whilst the slight upturn in billings from contractors is welcomed by agencies, margin pressure remains a concern. Demand for temporary workers remains strong in a few sectors, especially nursing and care workers, and there is some recovery in most others. Figures over the next two months will provide an excellent pointer to likely economic developments. Flexibility in labour supply continues to be a critical factor."
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Richard Powell, Shout99
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