It's a good time to be a contractor, PCG figures suggest

Wednesday 9 April 2014

With the UK economy strengthening all the time and the skills shortage placing talented individuals in high demand, now is a great time to try different ways of working.

Becoming a contractor is becoming more and more popular, and with new figures showing rising optimism among freelancers, it's not hard to see why. Indeed, it would seem that now is actually the perfect time to become a contractor.

The latest 'Freelancer Confidence Index" from the PCG has shown that 70.1 per cent of contractors expect the economy to improve over the next 12 months.

Twenty per cent claim their business is better off now than it was three months ago, with 17.9 per cent adding that their revenue has gone upwards.

During the coming year, 33.5 per cent of contractors expect their business to be better off.

The PCG claims these figures are a sign of the improving optimism in the sector and bode well for the rest of the economy.

"Due to their size and the way the sector spans almost every British industry, freelancers provide a unique and important insight into future macroeconomic trends. They are effectively the ‘budgie in the mine’ when it comes to our economy," Georgios Nikolaidis, economic policy adviser at PCG, explained.

The centrality of contractors to the economy and business growth means it's no surprise 26.7 per cent of freelancers expect their rates to rise over the next 12 months. Currently, the average daily rate for a contractor is £500.

"While this is a healthy daily income which reflects the high value placed on freelancers by their clients, 77.5 per cent saw no change in their fees over the last three months," Mr Nikolaidis commented. "Just 11.8 per cent reported an increase in their rates in the last quarter, while 10.7 per cent reported a decrease. This is right in line with the sluggish wage growth seen in the UK economy in general, where earnings have persistently lagged behind the inflation rate."

This means that while now is a great time to be a contractor, there is no room for complacency. Indeed, Barclays Bank has recently had to lower its rates for IT contractors - the third decline in as many years.

Nevertheless, demand for contractors remains high. The PCG found that 73 per cent have not been unwillingly out of work in the last three months. Just 14.7 per cent have spent more than a month out of a contract during Q1 2014.

A balance of +25.7 per cent was recorded for the availability of contracts in the first three months of the year.

Freelancers are confident these conditions will continue to, with 52.2 per cent claiming that over the next 12 months availability of contracts will increase. Just 9.6 per cent think availability will decline during 2014, creating a balance of +42.6 per cent.

By Victoria McDonnell

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