Contractor calculator market report - December 2007

• IT is up 8% over the previous month
• Engineering is up 62% over the previous month
• Electronics is up 18% over the previous month
• Construction is up 30% over the previous month
• UK economy falters on the brink, but is still standing

Despite tension in the UK over economic growth, and global tension in the Middle East, even with the price of a litre of petrol at over a pound, contractors here enjoyed a good month in November.

IT contractors in the UK saw a comeback in November, with overall growth in demand up 8% compared to October, according to Karen McDermott, head of Marketing at the Colchester-based job board Jobserve. Engineering saw very impressive growth, with 13,312 live jobs on JobServe which represents a 62% increase over the month of October. Electronics continued to thrive with an 18% rise, and construction was up 30% over the previous month.

''To a certain extent, this includes anticipation of demand by recruiters who are already thinking about Christmas,'' McDermott explains. ''But there is clearly a reasonable amount of buoyancy in the market which supports this growth.''

Solid Market for IT

Basic rates for IT contractors have remained unchanged throughout the third quarter of this year, according to a study by the London-based consulting firm Skillsmarket in collaboration with the London-based recruitment trade organisation Association of Technology Staffing Companies. The study shows that the average hourly rate for IT contracting holds steady at £40 per hour, although it goes up markedly where high-demand specialities are concerned.

Niche Skills Desirable

''It would seem that those permanent and contract staff working with C++, JAVA, Oracle, SAP or UNIX, or as analyst programmers and trainers were likely to have benefited from increased earnings over the period, the converse was true for those working with C or Lotus Notes together with those employed as programme managers technical support staff and Web developers irrespective of the nature of employment,'' the Skillsmarket study says.

Whether in a bid to improve earnings or some other reason, IT staff appeared more likely to be seeking work during the third quarter of 2007 with the percentage ‘seriously looking’ rising from 14% to 20% over the Q2-Q3.07 period and 50% or more of those working in certain roles apparently seeking work (i.e. operations managers, data analysts, support managers and technical architects), according to the study.

Says ATSCO CEO Ann Swain: ''2007 seems to be concluding the same way that it started with strong demand for contract and permanent IT staff. Our members predict this trend to continue into 2008 with those possessing niche skills more likely to see a rise in pay rates.”

SAP contractor skills are one niche area signalled by all experts as seeing particular demand.

Banking, Finance, Engineering All Up

It is interesting to note that, despite the pressure on the financial sector from the subprime crisis, banking and finance both grew in demand for workers during November, according to statistics from the Monster (job board) Employment Index for Europe. UK and Sweden drove the recovery, up to 119 from 109 points in the month according to the Index.

Engineers Profit from Increased Sales

The City is not the only place that is resisting economic trouble. Projects for engineers continue to drive a small boom in the marketplace. According to the Stockton-on-Tees-based consulting firm Plimsoll, civil engineers saw sales at their firms rise 15% in the last quarter. There are a vast number of projects underway which are driving this market, as Plimsoll explains.

Construction Also Project-Driven

These same kinds of projects are driving the construction market which is still very hot in the UK, again despite economic variances. While the Chartered Institute for Purchasing and Supply despaired of its year-on-year figures, with construction actually down on that basis, the same statistics show a month-per-month increase in the sector--just not as large an increase as last year.

Buildings under construction in the UK rose to a 15-year high in the three months to the end of November, according to research by Jones Lang LaSalle. The rise in construction came despite the fact that London wide vacancy rates fell to their lowest level since 2000. Research from the consultancy does indicate that returns on real estate investment fell markedly in the second half of 2007, but this does not seem to have affected market growth. Mega projects like the cross-town tube line in London, and of course the Olympics, continue to drive demand for contractors in the industry. And now the Government is planning to expand Heathrow Airport.

UK Economy in Flux

Despite all this activity, it is very difficult to make predictions about the UK economy. The Office for National Statistics said the economy grew by 0.7% in the third quarter, below the previous estimate of 0.8%. Annual growth was revised down to 3.2% from 3.3%.

Does this mean that the UK's above-trend growth is coming to an end? Nobody is sure, and this is because the supposedly slow economy keeps creating jobs, with about 8% job growth in the third quarter according to the Job Creation Index on a month-per-month basis, and a whopping 31% increase year-on-year.

So is the economy slowing down or not? The truth is that there is a crisis of confidence largely caused by poor reporting of the subprime crisis by the national media. Would you believe that, despite the amazingly high pound, manufacturing sales are actually up in the UK in the third quarter?

There are worries about the economy, largely because of the crisis of confidence, but contractors can plan on stability at least in the short- to medium-term. At least for the time being.