Demand for IT and engineering contractors in Scotland is outperforming the rest of the UK, figures suggest.

Tuesday 23 April 2013

Contractor demand is growing in Scotland, new figures suggest, outstripping the rest of the UK.

Contract staff billings rose for the ninth consecutive month in March, according to the Bank of Scotland’s Report on Jobs, even though growth was the smallest it has been during this period. The same could be said for vacancies, which continued in their upward trend, although the slowing rate of growth does suggest that demand could be reaching a plateau.

Nevertheless, opportunities remain within the Scottish labour market due to a continued struggle to find suitable permanent staff. Growth in demand for permanent staff may have grown slowly during March, but availability fell sharply for the second consecutive month - in contrast, the availability of interim staff rose to the highest level since last June, suggesting that contractors are primed and ready to take advantage of the shortage of highly skilled workers.

Hourly pay rates also rose slightly for contract staff, in line with a small increase in starting salary for permanent staff placed by Scottish recruiters.

But contractors should take the biggest encouragement from the fact that some key industries are still performing well. Of the eight employment sectors measured by the report IT and computing fared particularly well, while the engineering and construction industry also showed strong growth.

IT topped the table of of growth when it came to permanent staff, closely followed by engineering. Medical roles completed the top three, including doctors and other healthcare professionals as well as nursing staff.

Regarding contract workers, locums will be pleased to see that medical roles top the table, although nursing makes up a large portion of the group. Engineering and construction were ranked second, while IT took third place. Contractors in accounting and the financial services also enjoyed a rise in demand.

The news was less promising in some sectors, though, as it emerged that the executive and professional sector contracted sharply during March, dropping to seventh place in the demand league table for interim staff.

Nevertheless, demand rose in every region apart from around Aberdeen. While this is perhaps unexpected at a time when North Sea oil and gas is attracting record levels of investment thanks to tax breaks and other government incentives, the lag time between projects being approved, developed and finally coming onstream is likely to have played a part in the results.

Overall it may look as though the Scottish contracting industry is underperforming in relation to the rest of the UK, but sharp drops in some sectors are masking significant improvement in others. Executive and professional services contractors may be struggling with demand, but that does not negate the strong performance of the IT and engineering sectors.

According to KPMG and the Recruitment and Employment Confederation’s (REC) Report on Jobs for last month, demand for permanent and temporary staff grew at a slower rate last month, similarly to the Bank of Scotland research.

But looking at the IT and engineering sectors in particular, the sectors are doing much better north of the border than they are in the rest of the UK. Demand is still out there, and contractors are in a good position to take advantage.

By Victoria McDonnell

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