Contractor demand in the core contracting sectors of engineering and IT continues to increase, despite a slowdown in permanent hiring, according to two key UK labour market surveys.
The October Monster Employment Index is back in positive territory after a three month run of a falling headline index. Online demand for IT contractors has bounced back after a shock fall in September, suggesting this was a blip. And demand for engineers also increased in October, after zero growth in the previous month.
Monster UK & Ireland’s spokesperson Michael Gentle is cautiously optimistic about this month’s index: “Over half of the industry sectors record positive online recruitment figures, leaving the labour market as a whole on better footing than a year ago.” But he warns that the Eurozone crisis is holding back further growth in online demand.
October’s Recruitment and Employment Confederation (REC) and KPMG Report on Jobs highlights the first fall in permanent placements in two years. But it also shows that temp billings continue to rise, and that clients are not only still hiring contractors, but also taking on more of them and paying higher rates.
Although engineering has been knocked off the top spot of the Report on Jobs’ demand league table by nursing and medical care, it is still on second place, followed by blue collar jobs in third place and IT and computing in fourth. Both engineering and IT and computing have seen growth in demand slow marginally from September, but recruiters are saying that engineers, developers and business analysts are still in short supply.
According to KPMG’s Partner and Head of Business Services Bernard Brown, the fall in permanent recruitment can be attributed mainly to falling employment in the healthcare sector and public sector hiring cuts. He believes that contractors are benefitting from the economic uncertainty: “Nervous employers are placing recruitment decisions on hold amidst concerns over the economic outlook, in many cases choosing instead to plug gaps with temps.”
Market conditions for contractors have been uncertain over the last few months, particularly for financial IT contractors, with the UK’s financial sector continuing to shed staff. Despite the economic uncertainty and risks of recession caused in part by the Eurozone crisis, this latest market data suggests that prospects for contractors may be stabilising.