Contractor demand growth shows no sign of slowing in any of the core contracting sectors. Skills shortages might ultimately be bad for the economy, but IT contractors with niche skills in high demand are earning up to £1,000 a day. The ongoing recovery of the UK’s financial sector is having positive impact on IT contracting in London, the South of England and in Scotland. A government commissioned report on shale gas development shows a contract boom for oil and gas, engineering and construction contractors could be getting closer.
In this month’s ContractorCalculator market report:
- Demand for contractors across all core disciplines strengthens during November 2013, shows the latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs
- The Manpower Employment Outlook Survey for the first quarter of 2014 highlights that IT contractors with security, cloud and mobile skills are enjoying rates of up to £1,000 a day
- According to the Bank of Scotland Report on Jobs, Scotland’s contracting sector outpaced both permanent hiring in the country and the wider UK contract market in November 2013
- The last 12 months has seen a 122% increase in vacancies in London’s financial centre, improving financial IT contractor prospects, says November 2013’s Morgan McKinley London Employment Monitor
- Contractors in oil and gas, engineering and construction stand to benefit from up to 32,000 new jobs and contracts arising from shale gas development, says a government commissioned report by engineering consultants AMEC.
Contractor market continues to strengthen during November
The UK’s contracting market continued to strengthen during November 2013, although skills shortages continue to plague both the contract and permanent labour markets, driving up contract rates.
This is according to the latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs, which also shows that the demand dynamics of the core contracting sectors experienced some interesting changes during November.
Engineering was displaced into second place behind the blue collar and trades sector, which moved into first place in the demand table. Construction dropped to ninth place in November, which may be as a result of the winter slow-down in the sector.
IT moved up a place into fourth; accounting and financial was up a place, to fifth; and interim executives moved up a place into eighth. Financial contractors are experiencing much stronger market conditions in fifth place, compared to occupying a negative-growth ninth place for much of 2013.
IT contractors with data governance, cloud and mobile skills on up to £1k a day
IT contractors with niche skills, such as data governance, cloud and mobile, are “hugely in demand”, commanding rates of up to £1,000 a day, shows the latest Manpower Employment Outlook Survey for the first quarter of 2014.
“We’ve seen a significant increase in the number of jobs needed to fill posts in the IT sector compared with this time last year,” says ManpowerGroup UK managing director Mark Cahill.
“It’s becoming clear that in sectors like banking the future will involve smartphones and banking apps rather than branches and tellers – and the impact of that technological shift is already being felt.”
We've seen a significant increase in the number of jobs needed to fill posts in the IT sector compared with this time last year
Mark Cahill, ManpowerGroup UK
In London, which has been the UK’s jobs powerhouse throughout 2013, demand for contractors has shrunk. Manpower says the English regions are “making up the shortfall” as “for the first time in six years every region in the UK is showing a positive outlook”.
Contractor demand in Scotland outpacing the rest of the UK and permanent hiring
Contractor demand growth in Scotland reached near historic levels during November 2013, highlights the latest Bank of Scotland Report on Jobs. Scotland’s contracting sector outpaced both the rest of the UK labour market and Scottish permanent recruitment.
“The number of people appointed to both permanent and temporary jobs rose in the month while the number of vacancies available rose sharply,” explains Bank of Scotland chief economist Donald MacRae. “Employers are demonstrating their growing confidence in the continuation of the recovery in the Scottish economy.”
The report’s Bank of Scotland Labour Market Barometer, an index used to determine the overall health of Scotland’s labour market, rose to its second-highest level since data collection began in January 2013. This is “consistent with a sharp improvement in Scottish labour market conditions and one that was stronger than the UK average”.
London IT contractors can expect “an increase in hiring from January”
IT contractors are benefitting from the continued recovery of the UK’s financial sector, and particularly London’s financial centre. This is according to the Morgan McKinley London Employment Monitor for November 2013, which shows a 122% increase in vacancies compared to November 2012.
Despite a slight dip in vacancy numbers between October and November, there is an upward trend. “Despite a slight pre-Christmas dip in job availability, which we predicted last month, year-on-year there has been terrific growth in City hiring levels,” says Morgan McKinley Financial Services operations director Hakan Enver.
“The month-on-month decrease we have seen is indicative of organisations waiting until the New Year to begin the hiring process, namely within infrastructure and support functions where we expect there to be an increase in hiring from January onwards.”
The UK’s financial sector continues to be the second largest consumer of IT contractor services after software development firms. With London and the south accounting for 83.4% of all IT contracts, what happens in London has an impact on IT contractor prospects.
Oil and gas contractors are a step closer to a shale gas-driven contract boom
Oil and gas, engineering and construction contractors could be a step closer to enjoying a shale gas development-led contract boom following the publication of a new government commissioned report by AMEC.
The engineering consultant’s report shows that over half of the UK has shale gas development potential. If all of that is exploited, up to 32,000 new contracts and jobs could be created for oil and gas, engineering and construction contractors to build, operate and decommission nearly 3,000 onshore wells.
The broader economy would also benefit, as the high production scenario modelled by AMEC shows production in the mid-2020s could be three times the level of UK consumption.
“There could be large amounts of shale gas available in the UK, but we won’t know for sure the scale of this prize until further exploration takes place,” notes Energy Minister Michael Fallon. “[The report’s publication] marks the next step in unlocking the potential of shale gas in our energy mix.”