Credit crunch leads to fall in IT contractors

The proportion of IT contractors working in the financial services industry is at its lowest level for three and a half years following the recent credit crunch, according to research from giant group plc, the contractor services provider.

Twenty-two per cent of IT contractors now work in financial services, compared to 25 per cent in the 3rd quarter of 2007.

The research, based on a sample of 1,500 contractors, also reveals that optimism about job opportunities in financial services has declined significantly over the past 12 months.

Twenty-three per cent of IT contractors expect the most job opportunities to be in financial services next year, compared to 30 per cent at the end of 2006.

Matthew Brown, Managing Director, giant group, said: "The advantage to City institutions of using IT contractors is that they are a very flexible resource, which can be highly responsive to market conditions, and it is for that very reason that numbers are likely to bounce back strongly as the market recovers.

"The turmoil in the credit markets may actually lead to some good opportunities for IT contractors in the medium term, despite the short term correction. Banks and funds will be looking at IT solutions, such as improving their computer risk modelling and beefing up their back office IT systems to handle exceptionally high trade volumes.

"UK retail banks are still spending on security and e-banking technology, while investment banks should continue to require IT people in areas like risk management and compliance, so in other areas of finance IT skills should continue to be very much in demand."

Engineering and construction

According to the research, the public sector and the engineering and construction industry have both increased their shares of the IT contractor jobs market.

Fourteen per cent of IT contractors now work in engineering and construction, the highest proportion in the four years giant has been conducting its survey.