Contractor unemployment rate hits new low

Just 4% of contractors are spending more than three months out of work between contracts, according to new research.



The report, by contract services provider Giant Group plc, claims that the figure is the lowest since the downturn. The company's research also shows that only 3% of contractors expect their earnings to fall in the next 12 months, compared with 5% this time last year.



Giant Group expects this to push contractor rates upwards.



"Rates have risen fairly steadily over the past 12 months, but as contractor availability declines pressure on rates should further intensify, so we could see a much sharper rise in rates going forward," said Matthew Brown, managing director of Giant Group. "It's looking increasingly likely that aggressive headhunting of key IT workers, which characterised the last technology boom, will make a return. This will put strain on IT budgets, particularly in the public sector where cost containment is such a major priority."



Growing numbers of permanent staff are entering the contractor market as rates creep upwards, claims Giant. Contractors now make up 10% of the IT workforce, up 2.6 percentage points on last year.



"A buoyant contract market tends to suck in opportunistic permanent IT staff looking to maximise their income, but the number of these floating contractors is relatively finite," added Brown.



Giant's claims appear to be backed up by figures from JobStats.co.uk, the IT market stats website. While its demand chart shows a sharp drop at the start of 2006, overall there is a steady increase on this time last year. According to the site, as of the 15th September, there were 10,547 open positions being advertised in the UK.



The site also claims that the average advertised rate was £38 an hour, and the most frequent job title was business analyst, accounting for 0.9% of adverts spidered by the site.



Graham Taylor