Freelance IT demand holding steady

Demand for contract and permanent IT workers held steady in February, the Recruitment and Employment Confederation's Report on Jobs says.

General rates of growth of permanent placements and freelance workers' billings continued to slow last month. But the freelance IT sector continued to grow slightly.

REC's report showed freelance IT ahead of most of the other sectors to rest in third place out of eight at the end of the month. Both permanent and contract IT sat in bottom place for almost all of 2002.

REC noted: 'Demand for IT/Computing [contract] workers rose marginally for the second month running, following a twenty-two month period of decline, which began in March 2001.'

General average weekly billings from contract workers rose for the fourteenth straight month in February. However, the rate of growth was only modest and the slowest since February 2002.

Agencies widely linked weaker growth of billings to uncertainty regarding the current geo-political situation, which was reported to have made it increasingly difficult to attract new clients.

Agencies' margins on freelancers declined for the twenty-second consecutive month in February, reflecting fierce competition and rising wage rates. Nevertheless, although marked, the rate of decline of margins eased marginally for the second month in a row.

The only key skill set reported to be in short supply in the contract IT sector was 'Programmers.'

Average hourly rates of pay for contract workers continued to rise in February. Nevertheless, despite being the fastest for seven months, the rate of growth remained modest.

Recruitment agencies reported that higher pay rates were again paid to those candidates with skills in short supply, although the rate of increase was partially offset by high worker availability.

The number of people placed in permanent jobs by recruitment and employment agencies continued to rise in February, although the rate of increase was only marginal and the weakest in the current upturn in permanent placements, which began in March 2002.

The availability of staff to take up vacant positions rose for the twenty-first consecutive month in February. Moreover, the rate of improvement picked up to the fastest since last November.

Demand for IT/Computing staff was found to be largely stagnant. The only permanent IT skill set in demand was 'Software Engineers.'

Brett Walsh, Head of UK Human Capital at Deloitte & Touche, said: "February's Report on Jobs survey provides evidence that the current uncertain geo-political situation is having an increasingly adverse effect on the UK labour market. Indeed, the indicator of job vacancies suggested that growth of demand for staff has slowed sharply since last year to signal barely any increase in February. Although we are seeing few signs of large scale redundancy programs, employers are clearly reluctant to take on new staff or replace leavers."

Gareth Osborne, Managing Director at REC, said: "Any remaining confidence amongst bosses seems to be evaporating, as the situation in Iraq adds to existing fears about the economy. Flat growth in the labour market is concerning for the broader economy and we'll be paying particular attention to the forthcoming budget to ensure it doesn't bring further bad news for the labour market."

See this article for Jobstats' latest outlook on the freelance IT market.