Three quarters of IT contractors (76%) are predicting that their earnings will grow this year, a substantial increase in confidence levels from just one year ago, reveals research by giant group plc, the contractor services provider. 12 months ago only 54% of IT contractors were expecting their incomes to grow, the remainder forecasting stagnant (26%) or decreasing earnings (20%).
According to giant, the research shows that demand for IT contractors is at its highest since the dotcom boom and that growing scarcity of selected skill sets is expected to put upward pressure on earnings.
Matthew Brown, Managing Director, giant group, comments: “The financial services sector has traditionally been the principal growth driver for the industry. When things start moving there, times are generally good but what is particularly encouraging about the current market is that the public sector, which tends to be more insulated from cyclical trends, is providing additional ballast.”
Matthew Brown believes that competition between financial services and the public sector for the best IT people will continue to drive wages upwards, though it is unlikely the public sector will be able to go head-to-head with banks in a protracted staffing war.
He also suggests that the drop in growth in public sector IT spending should avoid any dangerous overheating in the IT jobs market.
“Public spending is near its limit at present but the political pressure on the Government to free up more cash for certain IT projects like the National Programme for IT in the NHS may mean lower-profile e-government projects feel the pinch,” says Matthew Brown.
According to the giant research, the public sector (23%) uses the largest proportion of IT contractors with financial services (21%) now in second place. However, when asked about prospects for future growth in the next year, contractors identified financial services (28%) as the likely prime mover, placing the public sector some way behind in second place (19%).
Explains Matthew Brown: “Compliance is expected to underpin IT spending in the finance sector over the next few years with institutions starting to get to grips with the data-management requirements of Basell II, for example.”
“The public sector’s e-government projects are scheduled to go live this year. Other projects, such as the Ministry of Defence’s £4bn outsourcing contract, are expected to pick up the slack but have yet to feed through to job creation.”
Contractors are also forecasting better times ahead for the telecoms sector, with 15% saying it will generate the most new contracts in the coming year. For example, BT recently won a £1.6 billion deal to provide and run Reuter’s data networks world-wide.
However, this good news has been partly offset by ongoing problems at Marconi and the rumoured merger between NTL and Telewest threatening to bring further consolidation to the industry.
“The UK’s appetite for high-speed broadband shows no sign of abating and the telecoms sector should receive a much-needed boost when 3G finally achieves mass market penetration,” says Matthew Brown.
Source: Giant Group