There’s some good news for contractors across all contracting disciplines this month, with economic and labour market surveys consistently pointing towards growth and recovery. IT, marketing and interim management contractors will benefit from improved financial sector performance. Contractors can also do their bit to rebalance the economy by supporting the improvements in manufacturing performance and contributing to the UK’s huge services export surplus. However, despite the upbeat nature of this month’s surveys and reports, recent economic performance figures taking the UK back into a technical recession and a eurozone crisis that won’t go away suggest that contractors may wish to start or continue stockpiling contingency cash, and/or looking for longer-term contracts, and/or ensuring their skills are at the cutting edge of what’s likely to be in most demand in their sectors.
In this month’s ContractorCalculator Market Report:
- IT is driving a surge in online demand for workers, increasing 25% over 12 months, reports the Monster Employment Index for March
- IT and engineering and construction contractor demand remains strong, but is slowing, according to March’s Recruitment and Employment Confederation (REC)/KPMG Report on Jobs
- The 90th Confederation of British Industry (CBI)/PwC Financial Services Survey reveals a sector showing signs of recovery and growth, with increasing opportunities for contractors in IT, management and marketing
- A new report by agency Russam GMS reveals that UK interim management contractors are becoming an increasingly popular UK export
- The Confederation of British Industry (CBI) Quarterly Industrial Trends Survey April 2012 shows improved order books and increased intentions to invest that may result in contract opportunities throughout the supply chain.
IT leads surge in online jobs growth
The IT sector has driven online jobs growth to reach its highest level since November 2008, according to the latest Monster Employment Index from March. Online demand for workers in the IT sector in March 2012 has increased by 25% compared to March 2011, and by 3.6% compared to the previous month.
The headline index showing online demand for workers across all disciplines grew by a more modest 2% between February and March and is up 8% compared to March 2011. The core contracting sectors of engineering and construction also feature in the Index’s top five growth industries.
“With online job opportunities at their highest level since November 2008, it’s really positive to see that the IT industry is going from strength to strength each month,” says Julian Acquari, Managing Director of Monster UK & Ireland, “The outlook for the UK does remain mixed, but more than two thirds of industries across the UK have exhibited annual growth, which indicates that the job opportunities online are picking up again.”
IT and engineering contractor demand growth strong, but slowing
IT and engineering and construction contractor and temp demand growth remains strong, but is showing signs of slowing, according to March’s Recruitment and Employment Confederation (REC)/KPMG Report on Jobs. These results contrast slightly with the Monster Employment Index, but the Report on Jobs’ labour market data is more recent and may suggest a ‘blip’ in demand, rather than a downward trend.
Billings fell at the fastest rate for two-and-a-half years, which the report blames in part on the Agency Workers Regulators, citing that survey respondents “frequently indicated that employers had chosen to convert temp workers into permanent employees due to the effect of Agency Worker Regulations.”
Sectors such as IT and computing and engineering and construction continue to perform well
Ronnie McCombe, KPMG
Despite AWR, slowing growth and falling billings, demand for contractors is still very much in growth territory, with the IT sector retaining third place and engineering and construction falling to second place in the demand league table, after nursing/medical care. “Sectors such as IT and computing and engineering and construction continue to perform well,” says KPMG partner Ronnie McCombe.
Contractors to benefit from strong spend intentions within the financial sector
Financial IT contractors and marketing and management interims look set to benefit from renewed investment this year in marketing and IT by the UK’s financial sector. This is according to the 90th Confederation of British Industry (CBI)/PwC Financial Services Survey, which also says hiring in the sector “rose unexpectedly…a similar increase is expected in the next quarter.”
“Financial services sales volumes and income continued to rise this quarter, putting the sector’s recovery on a firmer footing,” says CBI Chief Economic Advisor Ian McCafferty. “Optimism levels and business investment intentions have also improved, in contrast to last quarter as some of the worst risks around the euro area crisis have eased.”
For IT contractors, the improvement in financial sector performance and confidence highlighted in the report is good news, as the financial services industry remains one of the UK’s largest consumers of IT contractor services.
And as PwC’s UK Financial Services Leader Kevin Burrowes explains, a further potential boost to the future contract opportunities for both IT and marketing contractors is the enhancement of mobile and online capabilities: “Banks are also planning to invest in their businesses, particularly in their digital offerings.”
Growing overseas demand for interim management contractors
UK interim management contractors are becoming an increasingly popular UK export, according to The International Interim Market 2012, published by interim agency Russam GMS. International assignments make up around 11% of the overall interim market, but of the 460 interims who responded to the survey, eight out of ten had completed assignments overseas. And 67% had clocked up between five to ten years of international interim experience.
According to the research, 79% of interim management contractors say that demand for interims overseas is strong due to local skills shortages. Half of them also said that UK qualifications and the ‘British interim manager brand’ is prized highly abroad.
Project management is the most popular kind of international assignment, followed by general management and business development. One in five interims had worked on financial projects. In terms of industry sectors, half of interims had worked in manufacturing or engineering firms, 31% in professional services firms and 27% in banking or financial services companies.
Contract opportunity growth in the manufacturing sector and supply chain
Contractors working in manufacturing look set to experience renewed contract growth as the UK’s industrial sector bounces back from its slump at the end of 2011. The Confederation of British Industry (CBI) Quarterly Industrial Trends Survey April 2012 reports that orders and output are increasing and that confidence is high.
“Firms have seen manufacturing demand and production picking up in the three months to April, and with expectations of a further strengthening in activity in the coming quarter, they’re increasing their stock-building and investment plans,” notes CBI Chief Economic Advisor Ian McCafferty.
There are also signs that UK businesses’ huge cash stockpiles may start to be released, as investment intentions are positive for the first time in a year. This cash has the potential to cascade down through the supply chain, creating further opportunities to contractors in all disciplines.