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Contractor demand at twelve-year high, with growth in all core contracting sectors

Contractor demand reached its highest level since December 2000 during August 2013, the fourth consecutive month of growth. And agency billings grew at the strongest rate seen in over 15 years, with strong growth across all core contracting sectors.

The latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs for August 2013 also shows another sharp drop in contractor availability alongside further steep increases in rates. “This is a sign that skills shortages may be on their way,” notes ContractorCalculator CEO Dave Chaplin. “That’s good news for suitably qualified contractors, but less so for clients and UK Plc.”

REC chief executive Kevin Green was upbeat about the report’s results, but is also concerned about impending skills shortages: “August was an extraordinary month for the UK jobs market, with temp placements growth hitting a 15 year high.

“Our temporary worker index is the highest we have seen since 1998. The major issue now is the worrying lack of candidates to fill the jobs being advertised.”

Engineering contractors have shot back into first place from fourth during July, with demand for their services rising at the sharpest pace across all disciplines. Construction has slid into third place from second, beaten by nursing and medical care.

IT and computing contractors have improved their position since July, moving up a place in the league table into fifth. Month-on-month growth has been rapid, perhaps a symptom of the recent reports of ongoing skills shortages in the sector.

At long last the interim executive and professional and accounting and finance sectors have stopped exchanging last place in the demand league table: contractors in both sectors are experiencing solid, if uninspiring, growth, and last place is now taken by the hotel and catering sector.

The fall in contractor availability was at its fastest rate in six years, alongside a steep rise in pay, although the rise in pay was slightly below July’s five-and-a-half year high.

Although the combination of increased demand, reduced availability and elevated rates points to skills shortages, the surge in agency billings during August suggests recruiters are just about finding enough contractors to fill assignments.

However, skills shortages still loom, and recruiters have reported that they are finding it particularly difficult to hire engineers of all kinds, specifically electronic, mechanical, rail and structural specialists. Business analysts and developers are also in short supply.

Published: 09 September 2013

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