Contractor demand is increasing across the core contracting sectors of IT, engineering and construction, which should be cause for celebration. However, the slowing growth in the manufacturing sector and the impact of the oil and gas ‘windfall tax’ imposed on energy firms in the 2011 Budget could threaten contractor prospects in those sectors. Despite slowing growth, industry bodies are forecasting that manufacturing will continue to grow throughout 2011, and the decision of energy firms to postpone major investment may be reversed as the oil and gas sector engages with Ministers and Treasury officials to find a solution.
In this month’s ContractorCalculator Market Report:
- February’s Monster Employment Index shows contractor demand has increased across all contracting disciplines, with engineering and construction showing particularly strong growth
- Engineering and construction contractors take the lead in the demand tables, according to February’s KPMG/Recruitment and Employment Confederation (REC) Report on Jobs
- Contractor prospects in the manufacturing sector continue to be positive, with three key surveys confirming that UK manufacturing continues to grow, albeit at a slower pace than see in recent months
- Oil and gas contractors looked set to enjoy a 15,000 job-creation boost, according to a survey by industry training and skills body OPITO, but early indications are that the new ‘windfall tax’ imposed on energy companies operating in the North Sea could jeopardise that
- Interim management contractor prospects have suffered due to the recession. But, the positive news is that the gender pay gap has virtually disappeared, according to research by Executives Online.
Contractor demand online increases across all contracting sectors
Contractor demand online across all core contracting disciplines increased in February, while online demand for workers increased across the board, reaching a two-year high, according to February’s Monster Employment Index (MEI).
IT contractors experienced an increase in demand of 9.7%, with year-on-year demand reaching 23% higher than February 2011. Demand for engineers shot up by 15% from January to February and construction contractors experienced an unexpected surge of 17.5%.
Monster UK & Ireland spokesperson Isabelle Ratinaud warns contractors that, despite the renewed activity, competition for each contract will be fierce: “Candidates must ... remember that high levels of unemployment mean competition is strong, so they must continue to go the extra mile in applications and interviews to stand out from the crowd.”
Engineering and construction contractors most in demand, followed by blue collar and IT
Engineering and construction contractors surged ahead into first place in the contractor and temporary workers demand league in February. The KPMG/Recruitment and Employment Confederation (REC) Report on Jobs also showed IT & computing contractors holding onto the number three spot, after blue collar workers, for the second month running.
“The encouraging trend, which started in January, continued last month with…temp billings showing their strongest increase since May 2007,” says Bernard Brown, Partner and Head of Business Services at KPMG. “This might be an indication that a private sector led recovery is indeed under way.”
Recruiters identified C++ developers, engineers and oil and gas contractors as the key temp skills in short supply. There’s good news for contractors with these skills seeking permanent roles, as the report also identified permanent candidates with engineering and oil and gas skills as being in short supply.
Contractors in the manufacturing sector experience sustained, albeit slowing, growth
Contractors working, or seeking new contracts, in the manufacturing sector will continue to experience growth and improving prospects, although a recent survey suggests that growth may be slowing.
Three surveys this month all confirm that UK manufacturing continues to grow. They are: the Markit/Chartered Institute of Purchasing and Supply (CIPS) Manufacturing Purchasing Managers’ Index (PMI); the Confederation of British Industry’s (CBI) Monthly Industrial Trends survey; and the EEF BDO first quarter 2011 Manufacturing Outlook Survey.
Manufacturing production looks to have risen 2% in the first quarter, which would be one of the best performances seen over the past 17 years
Rob Dobson, Markit
However, the Manufacturing PMI for March has shown that manufacturing growth has fallen to a five-month low. Despite this, as Markit’s Senior Economist and author of the Manufacturing PMI Rob Dobson says, first quarter manufacturing performance is set to be the best in 17 years.
“Even after the March easing, manufacturing production looks to have risen 2% in the first quarter, which would be one of the best performances seen over the past 17 years,” he explains, “and the slowdown may simply represent a temporary easing from an unsustainably strong pace at the start of the year.”
Oil and gas contracts forecast to grow dramatically, but Chancellor’s windfall tax may slow or halt that growth
Oil and gas contract opportunities could mushroom according to a survey commissioned by oil and gas industry body OPITO (formerly known as the UK’s Offshore Petroleum Industry Training Organisation), as up to £40bn is being invested in the UK oil and gas sector. The report suggests some energy companies are planning to recruit hundreds of new workers.
OPITO MD David Binnie confirms that the investment will create new contracts: “This is without a doubt a startling set of opportunities and our estimates suggest that over 15,000 new posts will be required over the next five years to deliver these project plans.”
However, the survey was completed before the Chancellor George Osborne imposed a ‘windfall tax’ on North Sea oil revenues in his 2011 Budget last month. This has already resulted in energy companies such as Statoil, Centrica and Valiant Petroleum postponing or cancelling projects worth billions of pounds.
Interim management contractors suffer from recession, but gender pay gap disappears
Interim management contractors have fewer assignments, and the assignments they do win tend to be shorter. However, the gender pay gap has all but disappeared. This is according to research by recruitment specialist Executives Online, which also reveals the interim management contracting sector to be dominated by men over fifty.
Of the 934 interim management contractors who participated in the research, 85% of respondents were male and 70% aged 50 or more. Nearly 50% were not in an assignment and only 30% were in full-time interim management contracts. This compares with a figure of 40% who were in full time-contracts before the recession in September 2007.
Unlike other contracting sectors, interim management contractors generate most assignments through their own efforts. Only 38% of interim assignments were sourced via an interim or recruitment agency, compared to IT contractors who, according to JobsAdsWatch, are placed by an agency in 87.5% of cases.