The agency, which is based in Burgess Hill, West Sussex, says it has noted a gradual, but strong improvement in the market over the past 12 months.
In particular, it has found software engineers with a safety critical background gained in aerospace and defence, and with experience of ADA, C++ and C programming languages, most sought after.
"The 'real-time' IT market is definitely on the up," confirms Graham Rees, technical director at the agency.
According to Rees, Capital Software experienced a "real fall-off" in work from the market at the end of 1999 as clients postponed projects in anticipation of Year 2000 compliance problems. However, demand for skilled IT personnel began to pick up during the first quarter of last year, he says, rising steadily as companies gradually released development work.
Despite this improvement however, the market's recovery is being hampered by current skills shortages. "There is now a great demand for real-time contractors and skills are in very short supply," comments Rees. "The effect is clearly to delay the recovery, as companies struggle to attract the required staff."