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According to the report, average weekly billings from contractors also rose for the third successive month.
The growth in billings was attributed to 'clients' preferences for flexible temporary workers in the face of continuing economic uncertainty' and was the strongest in 12 months, but remained well down on that seen throughout much of 1999 and 2000.
Contractors hourly rates also rose in March but the rate of increase remained subdued.
REC reported agents' margins on contractors fell for the 11th consecutive month in March with the rate of decline easing slightly from the record pace seen in February. Agencies attributed the decline to 'rising wage rates and strong competition.'
The REC report shows a rise in demand for all contract workers except for those in the IT & Computing sector. However, the rate of contraction of demand in IT also eased for the third consecutive month.
Contract and Perm IT market is growing |
One-in-three recruitment consultants noted increased contractor availability on the previous month, largely as a result of recent lay-offs. Contractor availability has now risen for 11 successive months, nevertheless, with demand for contractors showing further signs of picking up, the rate of increase in availability eased for the fourth month running to the slowest since last July.
Contractors’ average hourly rates continued to rise in March. However, despite hitting a six-month high, the rate of growth of pay rates remained subdued and well down on that seen throughout the majority of REC's four-and-a-half year survey history. Recruitment consultancies commonly attributed further subdued growth of wages to the rate of improvement of temporary staff availability rising at a faster rate than current levels of demand.
Demand for IT contractors was put at 47.5 per cent and ranked eighth out of eight other sectors. Last April, demand was at 47 per cent and ranked in the same place.
Only 'Software Engineers' were listed as being in demand in the IT contracting sector.
Demand for permanent staff rose for the second month running in March, at the fastest rate for 11 months, signalling a revival from the record survey low of last October. The increase in placements was modest however, as employers remain cautious over recruiting new staff.
A consequence of this caution was the rise in weekly billings from contractors (with the strongest pace of growth for a year) as companies meet short-term business growth by hiring non-permanent workers.
The only permanent sector that failed to grow was IT & Computing, which fell for the eleventh successive month.
The March figures showed demand for permanent IT workers was down 10 per cent on last year at 45.5 per cent, falling one place to rank in eighth place. Mirroring the contract sector, only Software Engineers were listed as being in demand.
Availability of permanent staff improved again in March for the tenth consecutive month but was weaker than was recorded last month and well below the survey record seen last December. REC attributed this to fewer redundancies in 2002 and said the growth suggested rising incidences of skills shortages.
Brett Walsh, Head of UK Human Capital at Andersen, said: "The March Report on Jobs suggests that the outlook for employment continues to improve. In particular, the first increase in people placed in permanent jobs through agencies for eleven months and a further strengthening in growth of job vacancies in March are both strong signals that employers are again looking to raise capacity. However, companies clearly remain cautious with regard to taking on permanent staff and this is likely to act as a drag on employment growth. Consequently, although rising public sector employment has helped reduce the unemployment claimant count, a pool of available labour exists which is acting as a brake on upward wage pressures."
According to JobStats the average hourly rate quoted for IT contractors is £23 per hour and £37,300 per annum for permanent employees.
The top five skills are:
Management 26.4 per cent of jobs - Average rates: £31 per hour/ £41,400 per annum
Support 21.4 per cent of jobs - Average rates: £16 per hour/ £33,400 per annum
Design 17.0 per cent of jobs - Average rates: £37 per hour/ £39,200 per annum
Analyst: £16.6 per cent of jobs - Average rates: £26 per hour/ £37,400 per annum
Unix 16.3 per cent of jobs - Average rates: £36 per hour/ £39,400 per annum
The top five locations are:
London 26.3 per cent of jobs - Average rates: £26 per hour/ £44,000 per annum
City 6.3 per cent of jobs - Average rates: £34 per hour/ £48,000 per annum
Berkshire 5.4 per cent of jobs - Average rates: £31 per hour/ £39,200 per annum
Surrey 4.3 per cent of jobs - Average rates: £20 per hour/ £38,000 per annum
Hampshire 3.2 per cent of jobs - Average rates: £22 per hour/ £34,700 per annum
Nick Wells, founder of Jobstats, said: "The news with regard to contractors is not great. The demand has stopped falling but it remains at a very low level having fallen through all of last year. The relative demand is up however. This means just that the proportion of adverts for contractors has gone up. This trend started in early October last year. I would explain this as employers not wanting to make a commitment to a permanent employee and so taking on contractors instead. But the actual demand is down by about a quarter over the same period so there's really a lot more cloud than silver lining.
"The press recruitment advertising index (showing a slowing in the rate of decline) seems to reflect what I am seeing. It is interesting that the agencies are reporting a rise in billing for contractors since this will be a leading indicator for any pickup in the market. This is because the billings reflect (in the short term) a rise in the number of hours worked and if contractors are being asked to work longer hours this means that there's more work to be done and we should see recruitment pick up in the near future.
"The best I could say about the IT job market is that it seems to have stopped getting worse. But I would predict that we'll see a gentle improvement in demand in the next few months."
According to iProfileStats the top five skills in demand are:
| Rank | Skill | | 1 | JAVA | | 2 | C++ | | 3 | Unix | | 4 | MS SQL Server | | 5 | MS Visual Basic |
The top five skills by rate are:
| Rank | Skill | Rate | | 1 | J2EE | £48.50 | | 2 | Enterprise Java Beans | £47.46 | | 3 | JAVA | £43.00 | | 4 | Java Server Pages | £42.29 | | 5 | Sun Solaris | £41.44 |
The top five skills by salary are:
| Rank | Skill | Rate | | 1 | Sybase | £47,833 | | 2 | J2EE | £43,200 | | 3 | Enterprise JavaBeans | £40,444 | | 4 | XML | £39,233 | | 5 | Sun Solaris | £37,294 |
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Richard Powell, Shout99
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