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Contractors market hits new low

John Kavanagh
The millennium is ending on a new low for IT contract staff, with a fall in demand for an unprecedented five months in a row - and a further worsening of the freelance jobs market, writes John Kavanagh.

The alarm bells are also starting to ring for permanent staff, according to the latest survey by the Federation of Recruitment and Employment Services.

IT contractors are now firmly at the bottom of the league of demand across all eight sectors covered by the survey - and the only group to have been in decline in the last seven months.

The key point in the demand index is 50 - points below this mean decline. The IT contract staff index touched 80 when the survey began two years ago and fell below 50 for the first time last December, following a steady decline in the IT jobs market from Easter 1998.

The index stabilised at about 50 for the first half of this year but dipped to 47 in July, then 43 in August. A brief rally to 49 in September has been followed by a fall to the lowest-ever point of 42 last month.

The permanent staff index has been up and down about 60 since May and slipped to 57 last month. This made permanent staff sixth out of eight sectors in the demand league table. This time last year they were the clear leaders.

"The growth rate is stronger than a year ago for all jobs except IT," says Christine Little, chief executive of the Federation of Recruitment and Employment Services.

The findings are in line with the latest quarterly survey of job advertisements by research firm SSP for Computer Weekly, which shows that the number of jobs available has dropped by 40% in a year. The decline was seen to speed up during 1999 - although there were still 36,000 vacancies in the third quarter.

Many consultants, recruitment firms and other observers believe companies are freezing new development and recruitment until after they are safely through the change from 1999 to 2000. Once the critical period is over, the big demand is likely to be for Internet and e-commerce skills.


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