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With a gruesome winter finally yielding, and a promising spring ahead of us, the steadying of IT contractor rates appears to bring news that’s as welcome as the daffodils creeping out across the country. This quarter’s market report suggests two things; the drastic dip of mid-2009 was a blip, and further recovery will come from the financial sector. After Q2 2009 saw a dizzying fall in rates (a drop of 12% after months of gentle decline) and Q3 of the same year witnessed a sudden surge (rising 18%), the last two quarters offer less drama and more reasons for cautious optimism. Over the first three months of 2010, the average rate across the ten most commonly advertised IT contractor roles stayed constant at £28.45, a barely noticeable change of less than 1% from the £28.28 of Q4 2009. The biggest losers this quarter are project managers, who see their rates fall from £37 to £32, and the biggest winners are Java developers, who have gone from an average of £36.25 per hour to £40. C# developers saw a similar rise, nudging up from £30 per hour to £33. Elsewhere, movement was negligible, with .NET developers showing the next biggest slide, from £31.50 to £28.50. But what does this stagnation mean more broadly? At the end of what have been a troubling couple of years, consistency is to be celebrated. Yet, a number of commentators foresee trouble in the public sector, whoever wins the forthcoming general election. Bernard Brown, partner and head of business services at KPMG, reckons, “the UK is exiting recession at a pace. However, a lot of the current hiring activity is going on in the public sector. The public sector recession, which clearly is on the cards, hasn't hit the jobs market yet but when it does, the upwards trend we have seen over the last couple of months may come to a halt.” Mike Devlin of IT services firm Morse agrees, and cautions against over excitement, "The worst is not yet over,” he says, “the effects of public sector cuts are still to be felt, and could reverberate across the IT industry.” And over at IT recruitment giant Hays, the signs of a public sector slump are already being noticed, according to CEO Alistair Cox, who explains that, “we are seeing sequential growth in the private sector, offset by reductions in the public sector”. So, where might the presumed public sector bloodbath be offset? As is often the case, the financial sector leads the way into the next stage of the economic cycle, and here there is some hope for contractors. February figures from screening firm Powerchex suggest a recent boon for techies in the City, with a rise of 57% in the number of contract job offers made. But Alexandra Kelly, the firm's founder, warns against overexcitement. “It is fairly normal to see a small increase in job offers around this time,” she says, “especially amongst IT contractors to the financial sector; as we come towards the end of the financial year, managers tend to revive non‐vital projects as they realise they have money left to spend in their budgets.” Her assertion is backed up by the rise in rates for Java and C#, which suggests a flurry of projects moving into development. Both skills are particularly in demand for e-commerce and foreign exchange platforms. Hourly rates for C# in the City of London are up more than 10% on this time last year, and City Java developers have seen a rise of more than 13% over the same period. Kelly also notes that some areas of finance have yet to up their contractor intake. “Investment management firms seem to be treading especially carefully when it comes to recruitment,” she says. The idea of the City as salvation seems to be borne out by the locations of the biggest rate rises. According to figures from itjobswatch.co.uk, which analyses more than 100,000 advertised IT roles (contract and permie), rates in finance roles for IT contractors in the City have risen more than 8% on this time last year. There has been a 5% surge in the last three months alone. More broadly, IT roles in the City account for more than 10% of all advertised contract roles. But, while this news points towards happier times ahead, it might not be time to invest in a holiday home just yet. “We have seen signs that the economy is on the up,” says Kelly, “but firms are still being very cautious, as many believe any recovery we may have seen is very fragile and could easily be knocked off course." For the moment though, after the wild pitches of 2009, the consistency so far shown in 2010 is reason enough to be cheerful. Matt Farquharson Data sources: Apr 14, 2010 Email this article Printer friendly page Previous Page
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