Demand for IT staff dropped significantly between December 2007 and December 2008.
The latest report from the Recruitment and Employment Confederation and KPMG showed demand for staff slumped in most sectors.
In December 2007, IT and computing had a demand ratio of 58.5, compared to 2008's ratio of 35.3. The ratio is above 50 if demand for jobs rose compared to the previous month, and below 50 if demand is falling.
Some areas of IT are still experiencing shortages in supply, however. Employers are having trouble finding permanent staff for .net, PHP, C# and web developer roles. They are also looking for temporary CNC programmers.
The decline in demand is putting downward pressure on salaries across the whole economy, with year-on-year growth of salaries slowing to 3.3% in October 2008. This is compared to 3.9% in 2008 and 4.1% in 2006.
The report said, "Many respondents commented that a large pool of available labour meant that negotiating power rested with employers at the present time."