Contractors hoping for an early reprieve from the current economic downturn will be disappointed as, despite positive economic indicators, increases in market activity are taking time to impact on hiring organisations’ budgets. But there are glimmers of light, as some sectors report that confidence is on the increase.
In this month’s ContractorCalculator Market Report:
- The Monster Employment Index is down 2%, with falls in engineering demand
- E-Skills upbeat about prospects for IT and telecoms
- CBI/Harvey Nash survey says flexible working is helping firms beat the recession
- Financial services have a brighter future, although more jobs are to go first, says CBI/PricewaterhouseCoopers
- PCG survey shows contractors downbeat on economy.
Monster Employment Index
After a surprise increase last month, the Monster Employment Index is down 2%, with a slackening of demand for workers in engineering and research and development contributing to the overall fall. However, things are looking more positive for IT and manufacturing.
“Most indicators suggest that the UK economy remains stuck in a deep recession,” says Hugo Sellert, head of economic research at Monster Worldwide. “The latest reading from the Monster Employment Index shows that UK online recruitment activity has levelled off so far in 2009, but employer demand for workers still falls way short of recent years’ levels.”
Demand for engineering and telecoms workers has fallen significantly, but IT showed a small increase and contractors in the manufacturing sector have seen a marked increase in demand; this, according to Monster, is due to increased exports.
E-skills survey shows IT contractors in demand
UK businesses are more concerned with exchange rates, legislation, bank credit and consumer demand than the state of their workforce, according to this month’s UK ICT survey from e-skills.
The good news is that few firms plan to reduce their contractor headcount. In fact nine out of ten firms surveyed forecast that the number of IT/telecoms staff employed would remain unchanged, with two thirds actually anticipating an increase in worker numbers.
Most indicators suggest that the UK economy remains stuck in a deep recession
Hugo Sellert, Monster Worldwide
A quarter of firms surveyed are experiencing skills gaps. This is good news for IT contractors, who are ideally placed to provide flexible solutions for organisations that need experienced workers now.
Flexible workers are key to recession beating strategies
More good news for contractors comes in the form of the CBI/Harvey Nash Employment Trends 2009 report. Subtitled Work Patterns in the Recession, it shows that large organisations are implementing survival strategies that depend on a flexible workforce for success.
The boundaries between full-time permanent employees and contractors continue to blur, as 69% of companies surveyed have made, or intend to make, changes to working patterns within their organisation.
However, a significant amount of firms, 33%, have reduced their reliance on agency workers, choosing instead to invest in their full-time permanent workforces. This could leave many contactors out in the cold.
Financial services optimistic, despite job losses
According to the latest CBI/PricewaterhouseCoopers quarterly survey of financial companies, a further 28,000 jobs are likely to go later this year before the sector picks up. But 13% of companies in the sector are optimistic and are hiring at senior levels.
“Having seen business volumes tumble continuously for 21 months, some parts of the financial services sector look like they may be starting to come through the worst,” says Ian McCafferty, CBI chief economic adviser. “However, conditions remain challenging, particularly for the banks. Although demand looks like it is beginning to recover, it is doing so from a very low base.”
Contractors working in the financial sector can expect to see an increase in activity towards the end of 2009 as the rate of decline in the sector slows. But, although confidence is slowly increasing, it falls well short of levels experienced before the financial crisis.
Contractors tell PCG the worst is to come
Contractors have told the Professional Contractors Group (PCG) they feel the state of the economy is going to get worse. In a membership survey completed in May, 52% of contractors told PCG that the economy was likely to get worse, with only 19% believing it will get better.